[LINK] Copyright and DVDs

[David Boxall]

I forwarded one of Garry Brennan's posts to a contact with interests in the 
area.  His response is reproduced below, with permission.

------- Forwarded message follows -------
Date sent:      	Tue, 6 Mar 2001 15:00:40 +1100 

David

Thanks for fowarding this one - it presents an interesting avenue for
thought. My immediate response, though, is that it is unlikely to be
accurate. First of all, the Australian companies that distribute Hollywood
film products in Oz are mostly subsidiaries of the multinationals who own
the Hollywood film studios. Thus, they tend to take orders from Hollywood
and their profits go to Hollywood so the idea that they would lend equal
support to non-Hollywood Australian films (I saw a US film in production in
Martin Place when I was in Sydney last winter...) is not necessarily so.

Secondly, I know of no "legal frameworks" which might operate in Aust to
limit Hollywood's market power. Our Copyright Act 1968 gives film studios
(as well as authors, painters, software developers, etc) the exclusive right
to make available copies of thier work to Australian consumers. This
includes the right to import for the purposes of sale or supply. So if you
want to import a film reel containing a film to which Sony Pictures holds
the copyrights (very broad and amorphous set of property rights) then you
must have the express consent of Sony Pictures (or whatever the correct
corporate entity is). Since Hollywood films have such large market share
(whether due to quality of the product, large marketing budgets or decades
of monopolistic practices) in Australia, there is limited scope for film
distributors who do not traffic in Hollywood films. And since Hollywood has
power under Australian law to determine who will traffic in their films,
they have no incentive to give the rights to independent Australian-owned
distributors.

Importantly, region-coding does not help to maintain the system whereby
Hollywood sells the distribution rights for its films to local companies;
the Coyright Act 1968 achieves this by prohibiting parallel imports. Note
that the parallel import restrictions have been removed for CDs and
legislation is currently before Federal parliament to free up books and
computer programs(DVDs are not 'computer programs' for legal purposes
despite what you might think!)

Thirdly, the implementation of region coding does not appear to assist other
films to compete with Hollywood films. If anything, the system is designed
to be what economists term a 'barrier to entry'. That is, it raises the
costs of converting and distributing a film on DVD because a separate copy
must be made for each region. For a small market like Australia, the
implications of this are that fewer films will make it to DVD since the
costs of creating and handling a dedicated version for Region 4 may outweigh
the revenues available from this market. Those films most likely to be
commercially-viable DVDs are the high-volume Hollywood 'blockbusters' (if
anyone can explain the origin of this term, I'd be fascinated to know...)
while films from other countries, including Australia won't be there to
compete, thus further entrenching the Hollywood cultural and market
dominance. A good example of this is "The Castle", which I believe is
available in the US on Region 1 DVD but not on Region 4, despite being a
popular Australian film. The Australian audience for this film is so small
in the world of international film distribution that its not a
commercially-viable Region 4 product (South and Latin America are unlikley
to be interested).

Finally, I should tip my hat to the other side of the argument. DVD Video,
as a home-video specification, probably would never have got off the ground
without Hollywood support. If electronics firms are going to invest in a
media-playback device, there has to be a good range of media available for
the device to play back. Hollywood's primary concern was about piracy,
since, in theory, copies of the digital video and soundtrack can be made
without loss of quality (unlike VHS). But another concern was about the
potential loss of revenues in a world where consumers can buy from Internet
retailers a product which is relatively cheap to send by airmail. If
Australian consumers could buy the DVD before the film screens in Australian
cinemas, then the lucrative exhibition revenues might drop. 

Had this been the only concern, then old films need not be region-coded (I'm
not sure whether the DVD Video specification allows for DVDs that work on
players from any region); but that was not the only concern. It was also
important to be able to charge different prices for the same product in
different markets, since the Japanese are used to paying more for a video
than most Indians are. This is classic "multi-part monopoly pricing"
behaviour - like urban bus companies giving concessional bus fares to
student passengers and making up the loss by charging more to workers (but
in region-coding the benevolent aspect is lacking). In short: without
region-coding, the film studios would have seen their worldwide revenues at
risk and may have decided not to throw their support behind DVD. If that
happened, then we might not have access to high-quality films on DVD at all.

(...)

> -----Original Message-----
> From: David Boxall [mailto:david.boxall@hunterlink.net.au]
> Sent: Tuesday, 6 March 2001 12:35
> To: ...
> Subject: (Fwd) Re: [LINK] Oz copyright amendment
> 
> 
> Interesting bit of background.
> ------- Forwarded message follows -------
> Originally to:  	<david.boxall@hunterlink.net.au>
> Date sent:      	Mon, 05 Mar 2001 07:50:47 +1100
> Subject:        	Re: [LINK] Oz copyright amendment
> From:           	Garry Brennan <gbrennan@ew.aone.net.au>
> To:             	Rick Welykochy <rick@praxis.com.au>
> Copies to:      	<link@www.anu.edu.au>
> 
> on 5/3/2001 12:08 AM, Rick Welykochy at rick@praxis.com.au wrote:
> 
> > Artificially crippling the *playback*
> > ability of a work you legitimately purchase, solely for 
> market control
> > and profiteering is immoral, smacks of monopolistic control and just
> > plain sux.  I remember being gob-smacked when I first read 
> about DVD region
> > control.
> 
> You have hit on an interesting issue . . .
> 
> One of the reasons we have ended up with 'region control' is 
> because the
> international film and tv distribution system evolved over 
> many years around
> efforts to prevent monopoly control by Hollywood.
> 
> From the early days Hollywood tried to tie up national and 
> international
> distribution so that it had guaranteed outlets for its products.
> 
> This is how they originally wrecked the Australian film 
> industry, which was
> booming in the early years -- Hollywood got control our local 
> distibution
> and exhibition and Australian films could not get into the market.
> 
> In many places around the world (even in the US) legal frameworks were
> developed to break up monopoly control of distribution and exhibition.
> 
> Rather than distributing itself, Hollywood began selling 
> rights to various
> territories around the globe where local companies handled 
> getting the film
> to the audience. These local companies would accept films 
> from a range of
> suppliers.
> 
> One of the reasons regional coding has support from 
> governments around the
> world is that it helps maintain these 'anti-monopolistic' 
> arrangements.
> 
> Someone on this list once expressed the hope that Alan Fels and his
> anti-monopolistic troopers would ride into town and shoot 
> down regional
> coding. 
> 
> But it is possible that authorities could conclude that to do so would
> increase the ability of Hollywood to act as a monolpoly in 
> all world film
> markets, not lessen it.
> 
> There is no doubt that the abolition of coding would benefit consumer
> convenience; but it could also help give Hollywood a 
> lock-hold on the market
> and thus reduce consumer choice.
> 
> Such is the stuff of public policy and consumer law.
> 
> Regards
> 
> Garry Brennan
> 
> ------- End of forwarded message -------
> ====================================================================
> David Boxall                     |  The more I learn
> david.boxall@hunterlink.net.au   |  The more I realise
>                                  |  How little I know
> 

------- End of forwarded message -------