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A HOLIDAY MESSAGE FROM DISNEY CHIEF
Posted 23 Apr 2000 00:00:00 UTC

2600 was recently furnished with a copy of an email sent from Walt Disney CEO, Michael Eisner, to a vast number of Disney employees. While 2600 is not mentioned by name, the letter clearly focuses on the issues raised by the lawsuit Disney (and other MPAA members) have filed against us for publishing DeCSS on our website. In one paragraph towards the end of the letter Eisner actually makes our case for us and admits that either DVDs are too expensive and people pirate them, or they are affordable (which they are) and people don't pirate them (which they don't).

Our comments are in bold.

Dear Fellow Cast Members:

In several past e-mails, I have written you about the tremendous opportunities represented by the Internet. Today, I offer a caveat. While the Internet continues to be present great potential to our company, we first must fully address the issue of piracy.

For some reason piracy has been on my mind. Maybe this is because I keep reading about the seriousness of it, or maybe it is because I know a digital copy of a film is a perfect copy. Or maybe it is because I know that the Internet is a worldwide delivery system honoring no borders. Or maybe it is because I just needed something to speak about at the Variety/Schroeder's entertainment industry conference in New York City 10 days ago. Probably it is a little of all the above.

[A digital copy transferred over the Internet is likely to be compressed and far poorer quality than an analog copy.]

By "piracy," I'm not talking about the comical characters sailing the high seas at the Pirates of the Caribbean. Rather, I'm talking about an underground of secretive and sequestered pirates of encryption - the hackers who shamelessly assert that anything they can get their hands on is legally theirs. These Internet pirates try to hide behind some contrived New Age arguments of the Internet, but all they are really doing is trying to make a case for Age Old thievery.

[Wow that's pretty twisted. "pirates of encryption", who the hell are they? How does one pirate encryption? More so, what does that possibly have to do with people stealing? On top of all that, now 'hackers' is supposed to be synonymous with 'shameless thieving pirates of encryption'? Someone here is shameless, and it ain't us. "When they hack a DVD and then distribute it on the web", yet another jump is made from breaking encryption to PLAY DVDs to distributing it on the web. Funny how they haven't accused ANYONE of doing this. Nor would it make any sense for someone to "hack a DVD" before ripping it as a VCD - since VCDs are usually lower resolution than television.]

When they hack a DVD and then distribute it on the web, it is no different than if someone puts a quarter in a newspaper machine and then takes out all the papers, which, of course, would be illegal and morally wrong. The pirates will argue that this analogy is unfair, maintaining that all they're doing is cracking a digital code. But, by that standard, it would be justifiable to crack a bank code and transfer the funds from someone else's account into your own. There's just no way around it - theft is theft, whether it is enabled by a handgun or a computer keyboard.

[Of course pirates will argue that analogy is unfair - so would anyone with any modicum of critical thinking skills. While we could argue the difference between intellectual property and tangibles like a newspaper, this analogy is irrelevant because no piracy is actually taking place. Normally we wouldn't even feel the need to respond to this, but since he goes on to imply that WE are the "pirates" it seems like a good idea. Eisner speculates that people will maintain that all that was done was the "breaking of the digital code" - he's right. Note that breaking CSS does not involve any stealing or piracy. So then it does not logically follow that by breaking the code someone is also necessarily using it to steal. After all, CSS prevents DVDs from being PLAYED not COPIED, so cracking it is in no way an indication of impending theft.]

Of course, piracy has been around a long time. Many of you probably remember a very funny "Seinfeld" episode (I suppose that's redundant - they all were funny, except maybe for the last one) in which Jerry becomes an "auteur" at making illegal copies of movies by videotaping them off the screen at the local multiplex. But, piracy is anything but funny ... especially now that, instead of making one bad quality videotape for sale on the street, these digital pirates could soon be making unlimited numbers of high quality copies available on the Internet.

One of the fallacies of the piracy debate is that it's really just a conflict of the pro-technology members of the "New Media" against the anti-technology members of the "Old Media." This characterization couldn't be more wrong. At Disney we embrace technology. And we always have. Throughout his career, Walt Disney recognized new technology as the friend of the storyteller. And, at Disney today, we are not only seizing the tremendous possibilities offered by technology in movies, as with "Dinosaur" and "Toy Story," but we are also active participants in the expansion of the Internet with our GO.com family of sites. We intend to continue to devote resources to the Internet ... but not if this requires surrendering the rights to things we own. With this in mind, our company is undertaking a wide-ranging strategy to make the Internet truly safe for intellectual property. This strategy consists of five main elements.

First of all, we are turning to our representatives in Washington. Intellectual property rights are really no different from ordinary property rights. If you own something, you expect the government to respect your right to keep it from being stolen.

[Ah good, since legislating security away worked so well the first time!]

Secondly, we are working with governments around the world to respect our rights. We are actively involved in the Global Business Dialogue on Electronic Commerce, and our company is serving as chair of the Intellectual Property Work Group.

The third element is education. Working with The Motion Picture Association of America, we are advocating a more aggressive campaign to make people aware of intellectual property rights on the Internet. Most people are honest and want to do the right thing. But they can't do the right thing if they don't know that they're doing a wrong thing.

[Perhaps they should consider gaining a tighter grasp on reality themselves, before being so presumptuous as to educate others on the Internet.]

Fourth, we believe that the entertainment industry as a whole should take meaningful technological measures. Working in cooperation with technology companies, we need to develop innovative and flexible encryption devices that can stay one step ahead of the hackers.

[How about just doing it right the first time? Or better yet, stop infringing on the Fair Use Doctrine, so that people won't NEED to break the encryption!]

Our fifth initiative is economic. History has shown that one of the best deterrents to pirated product is providing legitimate product at appropriate prices. In the music industry, we have already seen that people will gladly pay fair prices for legally-produced product even when it can be easily reproduced and unlawful copies can be easily acquired.

[This is the best paragraph in the whole damn thing. Michael Eisner is actually admitting that either DVD prices are too high (like in the UK) or that piracy is not a problem because people will buy DVDs anyway - just like they do CDs. He is absolutely correct, we have been saying this all along. It is cheaper to BUY a DVD than it is to pirate it, and you get a nice clean copy complete with goodies. Finally, the truth comes out: PIRACY IS NOT THE ISSUE! Being able to PLAY legally purchased DVDs in the player and country of your choice are the issues! We're so glad Michael Eisner has finally admitted this - maybe now Disney will drop the lawsuit.]

With every passing day, I believe we are getting closer to a time when the Internet will become another important revenue stream for the studios. This is what happened with Pay TV in the '70s and with Home Video in the '80s. If we act appropriately and aggressively in combating the pirates, then this could be the dawn of a new era of opportunity for companies that consistently create great entertainment ... and there's one in particular that comes to mind.

So that's what has been on my mind the last couple of weeks, that as well as the strong showing of our company, especially at our parks and TV networks. Life is good. Have a nice Easter/Passover Weekend.

[Lashanah haba'ah b'Federal Court, Mikey]

Michael

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