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Entertainment Industry Practices Examined

Postby SlyckChuck » Sun Feb 20, 2005 12:12 pm

Consumers are very confused. Most have now bought computers and have been exposed to the phenomenon called peer to peer file sharing. Some ask which one to use? Which one is the best? Today some are asking which ones will not make me subject to a lawsuit by the entertainment industry. A very good question.


From what is known the industry has started a war against consumers by issuing lawsuits to those who offer too many files or items of content. They can be songs, movies, or even programs. Who are responsible, consumers or the applications? Even today, the Supreme Court of the United States of America is wrestling this very subject.

The entertainment industry has deep pockets and is enlisting any other allies in the entertainment field to back up their cause. So who is on the consumer’s side? The EFF (Electronic Frontier Foundation) and various others explaining there is a positive attribute of P2P.

No one could have conceived how this would impact the world until it was too late. The lawsuits the industry claims is to combat the lost sales they incurred as P2P popularity has exploded.

The question should be posed. How does such an industry gain so much power? It resembles a monopoly. Absolute control over setting prices, control over how it is shown or presented.

Once long ago, oil industries having total control over consumers wielded such power. At the turn of the 20th century, antitrust laws were made preventing any type of industry to abuse its consumers like it did.

It was called The Sherman Act. As it reads:


Trade associations are subject to strict scrutiny under the many federal and state antitrust laws. One of the most powerful of these is the Sherman Act. Section 1 of that Act prohibits "contracts, combinations or conspiracies ... in restraint of trade." But by its very nature, a trade association is a combination, such that there is no problem in proving the fact. This should serve as a signal to trade associations, that they must proceed with extreme caution lest they be cited for antitrust infringements, carrying stiff fines and jail sentences.

Moreover it explains: In addition to lawsuits prosecuted by the government, civil treble damage suits can be brought by competitors and consumers. By way of illustration, the Sherman Act prohibits any price agreement regardless of purpose. Thus, if members of a trade association have an agreement as to price, they cannot justify the agreement by showing benefits to customers. Members will be found liable for treble damages for injury resulting from the excess price charged.

Now to summarize this all up. We have an entertainment industry that is suing its own consumers to protect an outdated model of business. A new technology has sprung forth. One can say that there are growing pains for any type of growth in society. That being said, the final question should be asked "Why is technology or its consumers made to suffer for such an industry that failed to evolve?"
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Postby Fez » Sun Feb 20, 2005 12:18 pm

Dead on l_s...
Absolutely a point that needs to be addressed...
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Postby Wham » Sun Feb 20, 2005 1:55 pm

Good Article! However, I don't think you can compare the Entertainment Industry with Oil Companies. Oil is or was a staple of survival. Entertaiment, anyone can do without and survive quite well. Just a thought!
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Postby Gordonx42 » Sun Feb 20, 2005 1:57 pm

great article!
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Postby anlors » Sun Feb 20, 2005 3:16 pm

Oil is or was a staple of survival. Entertaiment, anyone can do without and survive quite well.


If we could survive without entertainment, surely there would be no need for sites like this, or P2P. Clearly there is a high demand for entertainment, and therefore, these types of goods can be very expensive to buy.
Imagine the chaos if you eliminated all forms of entertainment right now. No more CDs, DVDs, PCs, Music, Films etc. Back to the stoneage in an instant, we'd all go insane for sure.
If someone had a device that could eliminate all entertainment, they could hold the world to ransom, having more power than anyone could dream of. I think we all know who would like this kind of power!

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Postby DepecheNode » Sun Feb 20, 2005 3:59 pm

Whoa-whoa-whoa, I_S...

This is too big of a leap. The Sherman Act (1890) was enacted to stop the trend of larger companies to agree on fixed costs and prices to restrain the trade of smaller companies. This is seen as bad for consumers and ultimately bad for the economy as a whole.

The current incarnation of RI@@/MP@@ does not meet this requirement. Vertical price fixing is found to be "not neccesarily" illegal (State Oil Co. v. Kahn) because antitrust laws are in force to protect competition between competing brands. What I think you are suggesting is that an antitrust lawsuit be considered on behalf of consumers because of prices agreed to by member companies of the **@@'s. Unfortunately, this is not covered by antitrust. You have to prove that a cartel (conspiricy) was developed to restrict trade. As far as I can tell, the **AA's are trying to retain, not restrain their trade.

Also, by your way of thinking, an antitrust case could be made against labor unions... be careful what you wish for.

anlors wrote:If we could survive without entertainment, surely there would be no need for sites like this, or P2P. Clearly there is a high demand for entertainment, and therefore, these types of goods can be very expensive to buy.

I would go a bit further and say that entertainment in these mediums are indeed a cultural aspect of the American way of life. This is why the government still subsidizes art. Only when 'art' is seen as a commodity instead of a cultural 'right' will this fight be won. We're not there yet.
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Postby SlyckChuck » Sun Feb 20, 2005 4:26 pm

Also, by your way of thinking, an antitrust case could be made against labor unions... be careful what you wish for.



One can have an initial reaction to what you say. Still the Sherman Act is designed to control industry from unfair practices, not organized unions to better its collective against an industry. :idea:

This has been long thought out DN. What other industry fixes a price on such a commodity and controls where it can be shown or how it is sold? Remember Thomas Edison was never sued by composers after he invented the phonograph.. :idea:
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Postby notbob » Sun Feb 20, 2005 4:41 pm

ln_solitude wrote:This has been long thought out DN. What other industry fixes a price on such a commodity and controls where it can be shown or how it is sold? Remember Thomas Edison was never sued by composers after he invented the phonograph..


no, but he sued filmmakers for using his technology, and demanded a cut of the profits, which is why they moved to hollywood, in order to be out of his reach and work in peace

he also tried to control the wax cylinder industry exactly like the riaa controlled the record industry

history--learn it, or infinitely repeat it
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Postby DepecheNode » Sun Feb 20, 2005 7:12 pm

ln_solitude wrote: Still the Sherman Act is designed to control industry from unfair practices, not organized unions to better its collective against an industry.


Sorry, guy... the Sherman Act of 1890 was written specifically addressing retraint of trade, both domestic and foreign. Since we are consumers of the subject matter-at-hand, and not competitors, we have absolutely no legal standing under the Sherman Act.

BTW... while Edison was still trying to figure out wax drums, ayoung, uneducated inventor turned the world upside down by inventing the gramaphone based on Edison's invention. Little is ever mentioned of this man, the true father of the Recording Industry.
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Postby notbob » Sun Feb 20, 2005 7:25 pm

DepecheNode wrote:
ln_solitude wrote: Still the Sherman Act is designed to control industry from unfair practices, not organized unions to better its collective against an industry.


Sorry, guy... the Sherman Act of 1890 was written specifically addressing retraint of trade, both domestic and foreign. Since we are consumers of the subject matter-at-hand, and not competitors, we have absolutely no legal standing under the Sherman Act.



now the RICO act is another story

it has been used in circumstances like the one outlined above
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Postby DepecheNode » Sun Feb 20, 2005 11:43 pm

notbob wrote:now the RICO act is another story


To combat labor unions, yes... but only when such unions are under control of a 'corrupt organization' (i.e. LCN or other O.C.) for which the government can show one of 32 clear R.I.C.O. predicates. This would make a case for labor racketeering.
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Postby SlyckChuck » Sun Feb 20, 2005 11:50 pm

Take a look here


§ 2 Sherman Act, 15 U.S.C. § 2

Monopolizing trade a felony; penalty

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.


Tell me the industry is not running a monopoly? :idea:
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Postby DepecheNode » Mon Feb 21, 2005 12:24 am

ln_solitude wrote:Take a look hereTell me the industry is not running a monopoly? :idea:


They're not... and I'll tell you why. To monopolize (in an anti-trust sense) you need the element of restraint of trade.

***edit***

I typed a whole long macroeconomic explantion here just now, but it got confusing to even ME at the end. You'll just have to trust ol' DN on this one. Suffice to say that there can be no monopoly when there's nobody else waiting in the wings to bring you Nelly's new album.

However, if the **@@'s were to collude with an electronics industry giant to set prices for produced AND distributed entertainment, the DOJ would go after them in a heartbeat.

At this point, there's just no restraint of trade issue... if I've missed one, let me know.
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Postby Wham » Mon Feb 21, 2005 12:42 am

Well done! You guys/gals explained the difference between Big Oil and Entertainment quite well. The only thing I get upset about as a common roughly uneducated SOB is that the Music/Movie industry has basically controlled/fixed their prices and there is no competition in the industry at all. The prices are too high in my opinion but that is just my opinion and you know opinions are like A** Holes, everyone's got one.
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Postby DepecheNode » Mon Feb 21, 2005 1:14 am

Wham wrote:The prices are too high in my opinion


My opinion, too... :wink:

In generalization, we often refer to prices for CD's or DVD's as "too high" but often fail to realize that prices on fixed medium entertainment vary widely among artists, producers and distributors. Some entertainment can be quite affordable.

My problem is with music artists in particular. I don't think that an artist should recieve payment in perpetuity for distributed works in a fixed medium. I think they should go to work everyday like the rest of us. Let them earn their money live on stage, or from products and endorsements (like athletes).
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Postby d_lamer2003 » Tue Feb 22, 2005 4:13 am

DepecheNode wrote:
Wham wrote:The prices are too high in my opinion


My opinion, too... :wink:

In generalization, we often refer to prices for CD's or DVD's as "too high" but often fail to realize that prices on fixed medium entertainment vary widely among artists, producers and distributors. Some entertainment can be quite affordable.

My problem is with music artists in particular. I don't think that an artist should recieve payment in perpetuity for distributed works in a fixed medium. I think they should go to work everyday like the rest of us. Let them earn their money live on stage, or from products and endorsements (like athletes).


And do you think, that will ever happen?
People look at actors and musicians, as celebrities and that they have a status quo in modern (western) society of them being rich. I can assure you, that if you remove that think of an artist not being rich, 60% of the artists wanting to become famous today, they will surely stop practising music, or acting.

I agree with you though that artists and actors, are normal humans, and I too consider that they are paid tooooo much some of the big artists.
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Postby DepecheNode » Tue Feb 22, 2005 4:34 am

d_lamer2003 wrote:People look at actors and musicians, as celebrities and that they have a status quo in modern (western) society of them being rich. I can assure you, that if you remove that think of an artist not being rich, 60% of the artists wanting to become famous today, they will surely stop practising music, or acting.


Nah, I don't think so... :)

I think that artists will do what they are driven to do... that's one of the difinitive characteristics of an artist. I have to believe that most artists begin as a 'labor of love'. Of course, you'll have the exceptions like Metallica who chase music with the zeal of an Enron-type CEO, but I think for most artists, that's not how it is... to begin with, anyways.

If generally forced to adapt by market forces, I think most artists would dig performance based pay. After all, aren't most record deals heavily tilted to record companies? And, isn't a record (CD) just a vehicle to promote the artist?

**note**
This applies to music artists only... but the same could be applied to acting...
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