For nearly a decade, Hollywood has waged a titanic struggle with Silicon Valley over copyright law. Viacom’s long-running lawsuit against Google’s YouTube video service continues, and the two industries are still retrenching after a nasty battle earlier this year over Web piracy legislation. But there are signs of a growing thaw. Even as the YouTube lawsuit continues, top Hollywood agencies are actively seeking to represent hot tech start-ups. Now, William Morris Endeavor co-CEO Ari Emanuel has called on Silicon Valley to come together with Hollywood and work on a solution to piracy. Piracy, like all crime, will never be completely eliminated. But Emanuel, one of the most powerful figures in Hollywood, may be in a unique position to break the impasse — like Nixon in China. If he’s serious about making progress, tech giants should take him up on his offer.
This is not the first time an opportunity has emerged between Hollywood and Silicon Valley. (See Apple: a deal was done.) In 2001, longtime Warner Brothers executive Terry Semel joined Yahoo as CEO, with a vision of turning the pioneering web portal into an entertainment giant. Semel had deep ties in Hollywood, and if anyone could engineer a fusion of entertainment and tech, it was Semel, or so the thinking went. But Semel was a poor fit at Yahoo, not least of all because he had no experience running a giant tech company, but also because the two sides were nowhere near ready to work together.
It’s no surprise that Semel’s 2007 departure from Yahoo came as Viacom’s landmark copyright infringement lawsuit against YouTube was heating up. At the time, Silicon Valley was in the throes of the user-generated content revolution, while Hollywood was growing increasingly terrified of booming file-sharing services like Bit-Torrent, which threatened its core business model. Silicon Valley viewed Hollywood as a hide-bound, old-media relic desperately clinging to an obsolete business model. Hollywood viewed Silicon Valley as, well, pirates.
Old dogmas can be hard to break, and the mistrust between the two sides continues to linger. Last week, Hollywood super-agent Ari Emanuel launched a blistering attack on Google, criticizing the search giant for not doing enough to combat Web piracy. “We need Northern California to figure out how to keep our intellectual property from being stolen,” Emanuel said at the AllThingsD conference, referring to Silicon Valley. (In Emanuel’s famously combative style, the dispute boils down to a North vs. South struggle). Emanuel’s comments echoed the battle waged earlier this year over the Stop Online Piracy Act, a piece of anti-piracy legislation that was ultimately defeated after massive push-back from the Internet industry, which warned the law could harm free speech and damage the open Internet. That battle left bitter feelings on both sides.
One day after Emanuel’s comments, Google ad executive Susan Wojcicki responded. “I think he was misinformed, very misinformed,” Wojcicki said, in comments at the conference. “We do not want to be building a business based on piracy.” And in fact, Google has spent tens of millions on one of the most aggressive copyright screening operations in the entire industry. Moreover, Google says the law is on its side. Under the Digital Millennium Copyright Act, internet companies can’t be held liable if they promptly remove infringing content upon notification.
The battle over SOPA was a tacit acknowledgement by Hollywood that the “safe-harbor” provision of the DMCA really does protect Internet companies from liability: that’s why the studios backed a law designed to shift the burden for policing web piracy onto Internet companies and away from themselves. Viacom’s $1 billion lawsuit against YouTube, now mostly about the past, meanwhile, drags on, after a federal appeals court ruled earlier this year that the video site must once again defend itself.
There are but the faintest signs of a potential opening. Hollywood is moving to gain a slice of the tech start-up boom, and several of the top talent agencies including Creative Artist Agency, United Talent Agency, ICM Partners, and Emanuel’s own William Morris Endeavor, are actively moving to get in the business of incubating tech start-ups, according to PaidContent. William Morris Endeavor has been particularly aggressive, selling a 31% stake in itself to private equity tech titan Silver Lake Partners. That deal has led WME to shift its focus toward buying and investing in more tech start-ups, Emanuel said at the conference.
After the rejoinder by Google’s Wojcicki, Emanuel backtracked, in a surprising display of humility. He called SOPA “a reflection of Southern California’s arrogance.” He urged Silicon Valley and Hollywood to “step up and collectively resolve this problem,” adding: “Let me know where and when and I’ll be there.” After a decade of threats, lawsuits and acrimony, Emanuel clearly has his work cut out for him to build trust between the two sides. He’ll have to convince the most ardent defenders of Internet freedom — people like Techdirt’s Mike Masnick and The Verge’s Joshua Topolsky — that he’s acting in good faith. That means taking the time to actually understand Web culture, and how the Internet really works.
Like Nixon in China, Emanuel, as the most powerful advocate for Hollywood, is in a unique position to break the impasse. The next step is a serious discussion of the economics of the entertainment business, which has been transformed, like so many other industries, by the Internet. Emanuel has taken a first step, now he needs to earn trust by showing that he’s open to discussing new business models — and not just crowd-funding movies on Facebook. Subscription-pricing, a la carte cable packages, true on-demand availability — all of these things should to be on the table. Perhaps most importantly, if Emanuel wants Silicon Valley and Internet freedom advocates to play ball, he’ll have to show he’s genuine about working together on a lasting solution for everyone — Hollywood, Silicon Valley, and most importantly, consumers.