Mobile entertainment at crossroads
The color screens are in place, the power of operating systems for mobile devices is growing, the audience for downloadable gaming, video streaming, music players and radio receivers built into handsets is reaching unprecedented numbers.
The mobile entertainment industry is poised to bring an economic boom to the wireless communications industry.
In 2002, artists earned more than $71 million in ringtone royalties, suggesting that the estimated revenues for ringtone sales were between $710 million and $1 billion, according to the Mobile Entertainment Forum (MEF), and Booz Allen Hamilton, who issued a report in March called “Future Mobile Entertainment Scenarios.” Seven million Americans played a mobile videogame in 2002, estimates market research company IDC. By 2007, according to IDC, more than 112.4 million mobile gamers will connect in the United States.
According to the tenth Arbitron/Edison Media Research Study of consumer use of digital media, with data from interviews conducted in January 2003, 75 percent of Americans have access to the Internet, compared with 50 percent in January 1999. As of January 2003, Americans above age 12 who have tried Internet audio or video is estimated at 103 million.
Much of the economic boom fostered by mobile entertainment is in the black market, however. The International Intellectual Property Alliance reports that the estimated losses due to copyright piracy are more than $10.5 billion in 2002 alone.
The Recording Industry Association of America announced early in September that it filed the first of potentially thousands of civil lawsuits alleging illegal distribution. People sued allegedly distributed copyrighted files prolifically on Kazaa, Grokster, Imesh, Gnutella and Blubster.
Piracy is theft, but this is ugly. P2P United, a trade group supported by the file sharing industry, said it will reimburse the single, working mother of a 12-year-old the $2,000, which it says was “strong-armed” from her by the RIAA because the girl downloaded songs such as “If You’re Happy and You Know It, Clap Your Hands.” It accuses the RIAA of using $150,000-per-song lawsuits and high-paid lawyers to strong-arm $2,000 from single mothers in public housing and others without the resources to fight back.
Not only is this bad PR, but it is another example of how technology drives ahead of the law and businesses, like those represented by the RIAA, that are unable to anticipate how technology will affect their distribution models.
Part of the problem is with the Digital Millennium Copyright Act of 1998. This ill-considered reaction to the threat to intellectual property rights tramples due process and privacy rights. Among its many problems, subpoena provisions allow copyright holders to discover the name, address and telephone number of any American Internet user without filing suit or making a case to a federal judge, and turns network service providers into police.
Lawmakers need to call interested parties together to negotiate and establish a balanced process that addresses the needs of copyright owners and Internet service providers, while respecting the fundamental due process and privacy rights of Internet users. Balance the interests of everyone, and the consumers, businesses and wireless network operators should all benefit from a legal economic boom. Continue down this path and only the black marketers will profit with a lot of people getting caught in wheels of justice, much like the war on drugs.