In one will likely become a textbook example of a bad quote coming back to haunt you, Richard Parsons adressed the 56th annual National Cable & Telecommunications Association conference in Las Vegas with:

“The Googles of the world, they are the Custer of the modern world. We are the Sioux nation,” Time Warner Inc. Chief Executive Richard Parsons said, referring to the Civil War American general George Custer who was defeated by Native Americans in a battle dubbed “Custer’s Last Stand.”

“They will lose this war if they go to war,” Parsons added, “The notion that the new kids on the block have taken over is a false notion.”

Let us look beyond the fact that Parsons is attempting to portray the world’s media giants as underdogs comparable to Native Americans, which is already ridiculous on its surface. Let’s instead look to his larger message: Custer may have lost his last stand but while they may have won the battle, ‘manifest destiny’ ultimately steamrolled the Sioux nation.

Other than ridiculous statements, it seems that the official old-media stance on Google being a “frenemy” is now morphing into just plain “enemy” (much as we predicted back when the “frenemy” term was first coined).

Defying conventional logic, YouTube’s traffic has only surged since the Viacom snafu (according to Hitwise data):

It’s still early in the game, to be sure, but so far it looks like YouTube can keep calling Viacom’s bluff, especially since early research shows that YouTube traffic has surged, not suffered, since Viacom demanded the takedown of 100,000 purportedly purloined video clips.

According to RedHerring, Google CEO Eric Schmidt faced some tough questions about one of our popular postings recently:

Mr. Schmidt, however, denied that Google set aside a huge amount of hush money to be paid to media companies, which create a big chunk of the content uploaded to video hosting sites, to look the other way when copyrighted material is illegally downloaded to YouTube, which hosts videos that are viewed 100 million times daily. But Mr. Schmidt said Google is negotiating with the big entertainment companies over thorny copyright infringement issues, but solutions aren’t simple. “We’ve talked to everybody,” Mr. Schmidt said. “All the [media] companies have complicated rights management systems.”

Does it really matter if there is a “hush” money fund if suddenly all the media companies are willing to “negotiate”? In the end the effect is the same, copyright infringement can flourish on YouTube while it is crushed on smaller competitors. Oh well. 

Mark Cuban recently reposted an interesting “insider” tidbit from the Google + Youtube deal:

Since everyone was reaching into Google’s wallet, the big G wants to make sure the Youtube purchase was a wise one. Youtube’s value is predicated on it’s traffic and market leadership which Google needs to keep. If they simply agreed to remove all unauthorized content and saddle the user experience with ads Youtube would quickly be a skeleton of its prior self. Users would quickly move to competing sites. The media companies had 50 million reasons to want to help. Google needed a two pronged strategy which you see unfolding now.

To sum it all up, they claim that Google set aside a large portion of the $1.65 Billion to “pay off” the big media companies in a secret escrow account. In exchange, they agreed to drop all pending lawsuits to prevent the type of demise predicted here on BBB (and several other places). It will be interesting to see how people react at such an accusation. Since lawsuits are public record, it should be relatively simple to show companies suing much smaller video competitors for content which is already on Youtube’s site.

We’ll update you, precious readers, as this story develops.

An anonymous commenter over at TechCrunch summarizes some of our feelings about Google’s purchase of YouTube today:

seriously, is this the biggest con of all time? 1.65 biiiillion, for huge bandwidth bills, a lot of users who understand the word “free”, and a solid application that converts various video formats to flash? 1.65 billion for a flash conversion utility?

Unfortunately the commenter left out the saddest part which is the multitudes of copyright holders who held back from suing because YouTube didn’t have deep pockets. Let the games begin!

On the other hand, we should point out that the sale was paid for entirely with Google stock, so the funny money made the deal seem a lot larger than it might have been with cold hard cash.

We roll our eyes at these stories:

Having fans type “Desperate sex” into their Web browsers was apparently not the sort of grassroots marketing campaign ABC was hoping for to hype one of its top shows.

The Alphabet Net is calling foul after a rough cut of a sex scene from the upcoming season of Desperate Housewives was leaked on YouTube, nearly a month before the steamy footage was
slated to air.

Is anyone really surprised by this anymore? Seriously, how long will it take intellectual property owners to sue the pants off of YouTube?

We know we’ve said it before but sometimes it bears repeating. 

We have a new idea for TV execs:

Networks have increasingly been experimenting with giving viewers early looks at coming shows on their official Web sites, as well as on iTunes and through DVD rentals. But recently at least 10 unaired pilots have been leaked—apparently without the networks’ permission—to so-called peer-to-peer networks that allow users to download files stored on each others’ computers. In many cases, the pilots appear to have been “ripped” from official DVDs made for reviewers and company executives.

It’s unclear whether the leaks resulted from security breaches or quiet efforts to promote the shows. In either case, Internet leaks can sometimes pay off for TV shows. In June, a TV pilot called “Nobody’s Watching,” which the WB network had passed on, was leaked to the video-sharing site YouTube. It generated enough of an audience online that NBC decided to pick up the show for development.

At least four of CBS’s fall pilots have been circulated on the Web, a development that CBS spokesman Chris Ender calls “both flattering and frightening.” He adds: “We’re pleased that there’s an early demand for our shows but the marketing benefits can’t excuse what is illegal theft of our programming.”

Here is our simple plan for TV execs to make a killing:

Step 1: Take pilots that were never going to air anyways (so no loss of advertising revenue) and “leak” them onto the net.

Step 2: See which pilots the public actually likes as opposed to holding secretive meetings where you risk your career guessing what they like.

Step 3: Greenlight the shows that are popular.

Step 4: Make vague sounds about “theft” of your pilots to make them “edgy” and “underground.”

Step 5: PROFIT!

How exactly does uploading these pilots cause any harm to the networks? Since these usually don’t air, they don’t even lose commercial revenue.

In a victory for PR and Marketing:

Several major film studios are announcing plans Monday to make movies available for download onto PCs.

Consumers would be able to save the films to watch any time, and would pay between $10 and $30 to download, depending on how new the film is. New movies are expected to be released for download the day the DVD goes on sale.

The industry has been moving toward online distribution for a while, though just how eagerly is subject to debate. The new services, available through MovieLink and CinemaNow, should prompt repercussions along the distribution line, from DVD sales to cable TV to the video rental business.

Those of you who are regular readers of BBB will recall that MovieLink and CinemaNow (gotta love those iNterCap names) have been the long forgotten stepchildren of hollywood and the tech industry. What is amazing about this story is that it is a story at all. These services have been available for years (although the details have changed a bit) this is nothing new. Perhaps in light of the success of the iTunes Music Store selling tv downloads, the ugly stepchildren feel a little more confident these days.

We tried to checkout the details at the MovieLink site but encountered a stern:

Sorry, but as of May 2, 2005, Movielink no longer supports Windows 98 and ME operating systems.

Movielink also does not support Mac or Linux.

In order to enjoy the Movielink service, you must use Windows 2000 or XP, which support certain technologies we utilize for downloading movies.

And a similar warning pops up at CinemaNow:

You must use Internet Explorer Version 6 or higher on a PC running Windows 2000 or later in order to use the CinemaNow service.

Uh oh, we think we can predict how successful this Microsoft DRM‘d crap is going to be already.

Netflix hits pause on movie download plan:

However, due to problems obtaining license agreements with Hollywood studios, the test phase of the service has not been postponed. Hastings said the company would hit the play button on its plans “when the content climate beings to thaw.”

The studios’ reluctance to let Netflix squirt their movies down the wire is no great surprise. Because of its paranoia about unregulated distribution of its content Hollywood is currently about as keen on the internet as it is on thoughtful, foreign language dramas featuring real, unaugmented people. Perhaps Netflix would have more success if it courted Bollywood instead of Hollywood.

It seems funny how far apart Silicon Valley and Hollywood can be. They are only a little over 300 miles apart in sunny California but they might as well be on opposite sides of the planet. The software geeks are stumbling over themselves to create new video distribution sites too numerous to mention while the studio execs struggle to find new ways to restrict digital distribution.

The only solution is the California Republic civil war. North vs. South. We’ve got front row seats.

John Battelle’s Searchblog is an excellent resource for anyone who wants to know more about Google:

The ability to sell video is great, but not news. We’ve known that was coming. What is really interesting is the pricing leverage: Google is splitting revenues 70/30 - that’s 70 to the content producer. Also very important is that the producers of content are the ones who set the price - again, totally different from traditional models. Thirdly, Google is doing its own DRM. That’s very interesting, and probably best left as the subject of another post. Producers can decide to not use DRM, as Charlie Rose did, Feiken told me.

This is a major step toward entirely new models of content distribution, and if I were Comcast, DirecTV, the telcos, or frankly anyone in the traditional video business, I’d be a bit concerned. It gives content producers far more power to connect directly to audiences, and the leverage will only increase - in five years, it won’t be 70/30, it’ll more likely by 80/20.

John goes on to predict that the studios will be among the first to sign up for Google’s new service but we’re not so convinced. Firstly, the studios have already spent gobs of money building and promoting their own online movie distribution services. Their future is certainly in jeopardy but will the studios have the stomach to kill their own children right away?

Secondly, iTunes gives studios much more control over display, ranking and other promotions. If you have learned anything about the big content producers like the studios and networks from this site it is that they love micromanaging control over their product. The wild west of Google Video may be fine for indie producers but definitely not the studio’s style.

Introducing Digital Rights Management (DRM) definitely puts Google into direct competition with Apple and Microsoft. This should shape up to be an interesting race. See John’s post for links to other Google Video competitors.

The good news is they have finally found a way for tightwad studios to support upgrading to digital projection in theaters:

The digital projection guidelines, published in July by a consortium of Hollywood studios called the Digital Cinema Initiatives, say every five-minute chunk of video must contain a 35-bit “forensic marker” specifying the date, time and location at which the movie is shown. The guidelines don’t say how to get that information into the movie, but they require it to be “visually transparent to the critical viewer” and “inaudible in critical listening” tests.

The bad news is that the studios will never be able to justify the upgrades once they discover that steganography won’t stem the flood of piracy.

Let’s hope they upgrade all our theaters before they notice.

Nothing major was announced (although we are impressed that Hollywood bureaucrats actually trekked all the way to the AFI campus). The main gist of the conference was:

Cohen said BitTorrent.com will remove links that direct users to pirated content owned by MPAA companies from its search engine.

Yes, that’s all it was. They are going to remove illegal links from their search engine. You can all go home now, no revolutionary new technology is being released. Nothing to see here.

The rest of the press release is available after the jump.

We first reported back in early August that there were negotiations between the MPAA and BitTorrent inventor Bram Cohen:

“Motion Picture Association of America, Inc. (MPAA) Chairman and CEO Dan Glickman and BitTorrent Founder and CEO Bram Cohen will hold a press conference on Tuesday, November 22th, 2005 at the American Film Institute.”

Didn’t we tell you there would be a lot of announcements? This is getting seriously weird.

Update: While this “press conference” is getting serious attention over at sites like Digg, we have been unable to track down the alleged press release on the MPAA site (in fact, the only BitTorrent press releases seem to be negative ones). Someone has to be at AFI today, fill us in.

Those of you who remember last Tuesday’s posting, we ended it by telling Hollywood that the ball was now in their court. We didn’t expect the reaction to come so swiftly:

If Apple’s new video iPod is as successful as expected in delivering paid programing over the Internet, Hollywood’s unions want their share and are worried about being shortchanged on residuals.

Writers Guild of America West president Patric Verrone was the latest to voice these fears, issuing a letter to members Friday that said WGAW and its sister guilds are unwilling to accept the DVD residuals formula, which takes most of the money off the table before sharing a set percentage of gross revenue.

Essentially ABC is applying the less lucrative DVD formula to the downloads but the union is arguing that this is more like TV (which is a more lucrative set of residuals). This is hilarious only because this is neither TV or DVD…

You should really download this when you get a chance, its absolutely hilarious:

A Finnish spoof of the sci-fi classic “Star Trek” has boldly gone where no feature film has gone before, relying on free distribution over the Internet to reach more than 450,000 viewers in less than a week.

“Star Wreck: In the Pirkinning” is a full-length feature in Finnish with English subtitles. It was made over seven years by a group of students and other amateur film makers with a bare-bones budget and a few home computers to create elaborate special effects.

The funny thing about internet distribution is that it really blows away the old distribution stranglehold. Prior to this film, the most watched Finnish film was:

Finland’s most-viewed film ever is “The Unknown Soldier” (1955) with 2.8 million viewers. To reach the top three, “Star Wreck” would have to surpass 1 million.

As of right now the filmmakers estimate that they have already hit the magical one million mark and they very well may become the most widely seen Finnish movie in history (not that its a high bar to pass but a notable one nonetheless).

In an article woefully short on specifics, NBC Universal Chairman and Chief Executive Bob Wright says:

“The problems are spreading and no one is immune,” Wright said. “In my business we’re just looking over the shoulder of the music industry, which has gone through a very difficult time.”

You heard it here first folks, piracy has hurt the music industry! So Mr. Wright, what are you going to do about it?

“It’s something we have to do, but it has to be done well,” Wright said “These movies are so expensive we have to be careful ... We’re pretty close. Hopefully by the end of this year we’ll be able to do that.”

Huh? Do what? Launch online services for downloading movies? You already have two of those (the oft neglected CinemaNow and Movielink). Clearly that is not going to change anything.

Oh and just for added humor he even drops mention of the DVD format war:

“You’d always rather have one standard—that’s going to happen eventually,” he said. “Hopefully this won’t go as far as (the) Betamax-VHS (video tape format battle).”

This guy is on a roll. Next he will tackle world peace and conflict in the Middle East. Don’t you wish that vaguely restating obvious problems at a press conference was all that was necessary to convince the vulgar masses that you aren’t completely disconnected from reality? Bob Wright does. This makes Eisner’s closing speech look like a work of Shakespeare.

In a shocking turn of events, BitTorrent is now taking on competitors in a mad race to make love to Hollywood before someone else does:

BitTorrent, developer of one of the most popular software programs for acquiring free video and other large files on the Internet, has raised $8.75 million from a venture-capital firm.

BitTorrent says it will use the funds from DCM-Doll Capital Management to improve its infrastructure and make it more appealing to Hollywood.

Perhaps they should join the MPAA’s new technology lab (although we suspect they might not get along so well).

From Freedom to Tinker:

Hollywood argues — or at least strongly implies — that technology companies could stop copyright infringement if they wanted to, but have chosen not to do so. I have often wondered whether Hollywood really believes this, or whether the claim is just a ploy to gain political advantage.

Such a ploy might be very effective if it worked. Imagine that you somehow convinced policymakers that the auto industry could make cars that operated with no energy source at all. You could then demand that the auto industry make all sorts of concessions in energy policy, and you could continue to criticize them for foot-dragging no matter how much they did.

If you were using this ploy, the dumbest thing you could do is to set up your own “Perpetual Motion Labs” to develop no-energy-source cars. Your lab would fail, of course, and its failure would demonstrate that your argument was bogus all along. You would only set up the lab if you thought that perpetual-motion cars were pretty easy to build.

Which brings us to the movie industry’s announcement, yesterday, that they will set up “MovieLabs”, a $30 million research effort to develop effective anti-copying technologies. The only sensible explanation for this move is that Hollywood really believes that there are easily-discovered anti-copying technologies that the technology industry has failed to find.

So Hollywood is still in denial about digital copying.

We couldn’t have said it better ourselves. (via BoingBoing)

OK, we take back our “worst-idea-ever” comment on Tivo and now apply it to the following:

The six major Hollywood studios, hoping to gain more control over their technological destiny, have agreed to jointly finance a multimillion-dollar research laboratory to speed the development of new ways to foil movie pirates.

The new nonprofit consortium is to be called Motion Picture Laboratories Inc. - MovieLabs for short - and will begin operation later this year. According to Hollywood executives involved in its establishment, MovieLabs will have a budget of more than $30 million for its first two years. The idea arose out of Hollywood’s contention that the consumer electronics and information technology industries are not investing heavily or quickly enough in piracy-fighting technology.

Historically there is a reason why non-technology companies do not usually do research and development in high-tech. Its expensive and complicated (duh) and a bitch to get everyone else to adopt it. I have no doubt in my mind that this new lab can come up with all sorts of wacky ways to protect content but if it adds $40 to every DVD player out there then you are going to find a lot of resistance.

The Hollywood studios have teamed up on research and development before, most recently in the Digital Cinema Initiative, through which the major studios combined with the Entertainment Technology Center at the University of Southern California here to write uniform specifications for and test digital movie distribution technology.

Oh yes, that Digital Cinema Initiative was awesome. They’ve been around for how many years now? Oh and look how awesome all those digital cinemas are going…

Oh wait, there are none…

Bad news people. Bad news. Do we really want to give Bill this much power? What are you thinking!? From CNet:

For the first time, the Windows operating system will wall off some audio and video processes almost completely from users and outside programmers, in hopes of making them harder for hackers to reach. The company is establishing digital security checks that could even shut off a computer’s connections to some monitors or televisions if antipiracy procedures that stop high-quality video copying aren’t in place.

In short, the company is bending over backward--and investing considerable technological resources--to make sure Hollywood studios are happy with the next version of Windows, which is expected to ship on new PCs by late 2006.

Do we even have to bother to mention that Russian hackers will crack this in less than 24 hours rendering the entire excercise a complete waste of time? All it will do is make our computers slower and more expensive (but thats what buying Windoze does in general). Hey, yet another reason to go out and buy that Powerbook you’ve been drooling over.