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reply to jkoblovsky

Re: Why we are not opposing motion on Monday.

said by jkoblovsky:

There's an economic term called "creative destruction":


What this term basically means if that while one part of the industry has suffered as a result of technological change (meaning P2P downloading) other parts of the industry are benefiting from it (including studio's like Voltage). There's evidence of this in industry's own economic numbers they release, along with evidence of this in independent economic studies as well. It's now for the most part an economic fact this is happening. The government knew this when drawing up the new legislation, and one of the reasons why they have put forth a legal test to prove actual losses have occurred before the stat damages can even be considered. They have to prove losses before stat damages are awarded. That again was supposed to be a "deterrent" for lawsuits.

That's an interesting point. We can't escape progress which has shifted distribution from the physical media to the virtual media. Rather, we don't want to escape this progress, as we can now acquire the same content for cheaper, if not outright for free. Using the Creative Destruction premise, the physical media lost its financial feasibility, as the virtual media gained it. Also using the same premise, this argument on its own is not enough to demonstrate loss. For this, a plaintiff has to demonstrate that his loss and somebody else's gain are directly linked by a third party's action. This third party is the person downloading the material instead of purchasing it in a street store.

But that's still not enough. The plaintiff must also demonstrate who gained from the third party's actions, and how much they gained from it, and demonstrate direct evidence that it is indeed the actions of the third party that caused both the loss for the plaintiff, and the gain for the competitor. Simply proving loss is absurd. Everybody and every enterprise loses at some point or other. This is normal.

Hypothetical scenario where a person downloaded content without authorization.

There's an IP associated with this action, it's visible by simply using the same software this person used. In this case, let's say it's BitTorrent. As far as we know, nobody who's currently downloading the content gains from it nor from the simultaneous uploading which must occur due to protocol requirements, except for the simple acquisition of the content itself, presumably for personal use. But where does the content come from originally? It could come from a person, who gains little from it either, if only to brag to his friends that he did it. It could also come from a for-profit enterprise. Private torrent servers are presumably such enterprises. Either way, the original copy came from somewhere. Take DVDRips for example, these are ripped from an actual physical DVD, most likely purchased with real money. So the plaintiff did receive money for this copy. Telesync also comes from one copy which was purchased, this time from the sale of the ticket.

But what matters here is if the plaintiff's loss is due to the third party's actions, and a competitor's gain. So, let's take a private torrent server, and assume that it makes a profit. Plaintiff must prove third party downloaded content through the private site, and must prove private torrent site gained from that, and how much gain was made. That's a whole lot of if's before any statutory damages can be claimed, let alone awarded, let alone paid.

Here's my problem with all this. Virtual distribution is cheap, real cheap. It costs very little for the distributor since most of the cost is incurred by the downloader, as he pays for his connection, moneys which then subsidize all connections for the ISP that provides it. And with BitTorrent, it's even cheaper since most of the cost of distribution is also transferred to the downloader, as he now must upload thereby alleviating connection costs for the distributor.

So why is Voltage not in the business of doing online business, instead of fighting online business? Let's not fool ourselves. Even a private torrent server, which presumably does most of its profits out of distributing content without authorization, is still a business.

Here's a crazy idea. Why don't Voltage and all the other content makers approach private torrent sites, and boldly offer them partnership? It makes sense to me. All the infrastructure is already there. The customer pool is already there. The money/content model is already there. The entire industry is already firmly established, and most likely will only grow bigger, if not eventually completely replace the old ways of doing the same business. Creative Destruction, you see. The bulk, if not all, of the work is already done, at no cost to Voltage to boot. OK, maybe some of the cost was incurred by Voltage as they did finance the movies that are distributed through those sites. But other than that, Voltage paid nothing for a fully functional content distribution industry. To me, the solution is real simple.
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