Sony CEO Michael Lynton: Douchebag

Michael Lynton, CEO of Sony's Hollywood studios, really stepped into a pile of you-know-what when he was quoted as saying, "I'm a guy who sees nothing good having come from the Internet. Period." Ouch! He was rightly ridiculed for the statement.

He then tried to *ahem "clarify" his statement by writing an article at the Huffington Post. (For those who don't know, the Huffington Post is where the rich and famous go to blog, because, apparently, there is no other way for the rich and famous to get out their message.)

The premise of the whole article is how piracy is so bad and the mean ol' internet is hurting his profits er... ah... hurting the artists that make him rich... I mean, hurting the creative people that work for him.

my point is this: the major content businesses of the world and the most talented creators of that content -- music, newspapers, movies and books -- have all been seriously harmed by the Internet.

Now, to his credit, Mr. Lynton does pay some lip service to what is great about the internet:

my concern about piracy does not obscure my understanding that the Internet has had a transformative impact on our culture and holds enormous potential to improve the prospects of humanity, and in many instances already has.
*snip*
And yes, new talents have emerged thanks to the democratic and viral impact of the web. Yes, the rise of new distribution platforms for existing content is exciting and rich with promise.

At this point we come to his giant, "but": And that is that the internet has doomed DOOMED! everything that we enjoy reading\watching\listening. He tries to make his point by using several dishonest arguments. First, by using a strawman argument:

But at the same time, I cannot subscribe to the views of those online critics who insist that I "just don't get it," and claim the world has so fundamentally changed because of the web that conventional practices concerning property rights no longer apply; that the Internet should be left to develop entirely unfettered and unregulated.

Nobody is suggesting that the internet be completely "unfettered" and "unregulated". Anyone who has seen an episode of "to catch a predator" knows that law enforcement has a place on the internet. What people are arguing for is that law abiding users have their privacy maintained. Also, people want to make sure that there is an even playing field so that the best service wins, not the richest. His next bad argument is pure hyperbola:

In no other realm of our society have we encountered so widespread and consequential a failure to put in place guidelines over the use and growth of such a major industry.

Really? How about the massive growth and subsequent increase of train accidents in the 1870s that lead to hundreds of deaths because there wasn't enough rules and regulations to guide them?

How about the terrible air pollution caused by rampant industrialization in London 150 years ago, or any of the other hundreds of ecological disasters in history caused by "unfettered and unregulated" growth of new industries?

Need something more recent? How about our current financial crises caused by over leveraged derivatives in the financial industry? No... no... no. All those other things pale in comparison to the "great content theft of the 21st century". Mr. Lynton also stoops to really bad analogies:

Internet users have become used to getting things when they want it and how they want it, and those of us in the entertainment business want to meet that kind of demand as efficiently and effectively as possible. But what has happened online is that if it is 'beyond store hours' and the shop is closed, a lot of people just smash the window and steal what they want.

With this argument, I think we're starting to inch towards what is really bothering Mr. Lynton and his fellow studios. He reasons that people will steal content when they can't get it how they want it. In his crap analogy he says people "smash the window" and grab what they want. That is a poor analogy. What is really happening is that people are finding the store closed, but some street vendor says , "I see you really want that DVD... I sell it to you now, and for less". Now some are honest enough to say no, while others are not. Consumers are trying to get what they want, when the studios won't give it to them, other, less honest brokers, will.

It is so interesting the way Michael phrases his "point". Because I can't disagree with him. Read what he says is his point. He's not saying all artists are hurt, he's also not implying that the quality of the content is being hurt, just the artists that work for him and the other big content distributors. Now, he probably didn't mean to word it like that, but it's still the truth. The major content businesses have been harmed by the Internet, but it is not piracy that's hurting content distributors.

So what is it about the internet that terrifies the major content distributors? The internet means that they are no longer the gatekeepers between the people making the content, and the people who consume it. This is the fight that is playing itself out over and over again for each major content business.

The first industry to realize the danger of the internet was the music industry. The RIAA's grip on the industry was perhaps the most extreme and was the first to start to slip away. The music industry controlled everything from what you heard on radio stations to what CDs were mass produced and sold to big box stores. Now, here comes the internet. Artists no longer have to "sign" with studios. Just upload your music and people can preview and pay for it. Sure, it all started with fighting piracy and they rightfully beat Napster. Since then, they have done everything to keep control - to remain the gatekeepers. They even bought out mp3.com, the most popular music site for independent artists, and let it atrophy into nothingness.

Other commercial products came along. The most famous is itunes. But even then the industry tried to keep control. They only sold "DRM" music. That meant you could only play on certain compturs, certain devices, and could "expire" at any moment. People said, "no thank you" and piracy continued on underground networks like Gnutella.

Now the music industry has just about given up. Some of them are actually letting apple sell their songs with no DRM. It has been a tough slog getting here. The major music distributors are finally selling what Napster was giving away for free a full 10 years ago. And they wonder why people keep calling their industry a dinosaur.

The fight with the RIAA isn't over yet. I bought a new CD last week. It had 18 tracks on it. It cost me 14$. That same amount of music on itues would've cost me 18$. The music industry is still charging consumers more for the same product even though the distribution costs of itunes is less than that of a CD.

The movie and TV industry are having the same fight, it's just a few years behind the music industry. In response to YouTube and other video sites, their first instinct was to sue them all into oblivion in response to "piracy". The biggest sites complied and do their best to take down copyrighted material. The smaller ones disappeared, and were replaced with new ones. Just like the music industry, the MPAA and Television studios were playing legal whack-a-mole - a very expensive game. Worse still, in the absence of their "high quality" content, consumers started finding independent artists that were uploading movies that were just as entertaining as their own crap.

Eventually, the industry decided to start making their content available on demand just like the consumers wanted.(to their credit, this decision came about much quicker than the RIAA's decision) This has given rise to sites like hulu which kick ass and provide a revenue stream to the content creators.

Now let's take a look at the newspaper industry. Newspapers are facing declining circulation. Why? Because bloggers and websites are giving away for free what newspapers are trying to sell. Sound familiar? Their first instinct was to sue away their competitors into oblivion. (just like the RIAA and MPAA tried) The AP started threatening bloggers who Linked to them. They have also talked about threatening news aggregators like Google. This newspaper fight isn't over and I'm not sure how it'll turn out. Although, I'm willing to bet that whatever happens, successful businesses will make money online and stop suing.

The book publishing industry seems to be facing the same thing. There seems to be a huge worry about pirated eBooks. This fight will play out just like the other ones. It is also a fight that I will have a vested interest in as an "independent" content creator. Just like the other fights, the big publishers will try to maintain an iron grip, and they will lose it.

Piracy, even on the internet, is bad. But that's not why people like Michael Lynton try to demonize and belittle the internet. It's a red herring. They use it as an excuse for not giving people what they want at a price that's fair. Mr. Lynton pays lip service to the democratizing effect of the internet, but at the same time he doesn't want to compete on that fair field.

So, whenever the head of a major industry bemoans about how their industry is doomed DOOMED! by the internet, remember why. They might talk piracy, like Michael Lynton, but that's not what keeps them up at night. It's the idea that they no longer have control that keeps them up at night.