XBiz News: 07-03-03

Stephen & Dawn Yagielowicz

This week's news wrap up focuses on the issues and events that shape our industry, including recent trends in Supreme Court rulings, file sharing wars, celebrity copyright lawsuits, and porn's impact on mainstream America...

Freedom Isn't Free
From the Picayune Item Local News, comes the headline "Supreme Court leaves free-speech advocates empty-handed."

Claiming to protect the public from pornographers, cross-burners, drug dealers living in public housing, and dishonest telemarketers, the Supreme Court Justices supported the government's position in every First Amendment case they ruled on during their most recently ended term. According to free-speech expert and New York attorney, Floyd Abrams, "It's not a disastrous First Amendment year, but certainly one that gives no cheer to First Amendment advocates."

Among the term’s rulings, The Walt Disney Co. scored a victory, with the court granting longer copyrights for cartoon characters like Mickey Mouse; plus songs, books and other creations worth billions of dollars.

An appeal from shoemaker Nike that would have given the court a chance to give broader protection to commercial speech, was dismissed as the court refused to decide whether Nike's claim that its ads and statements defending overseas labor practices were constitutionally protected free speech, and not false advertising as a California activist alleged.

By a 6-3 margin, justices rejected arguments from librarians that anti-porn computer filters are censorship that block legitimate science and health information. That ruling upheld Congress' third attempt to shield children from porn. Now, public libraries are required by law to equip computers with porn-blocking technology if they want to receive federal money.

Last year, the justices blocked government advertising rules for pharmacies that mix specialty medicines. Regarding the pharmacy case, Justice Sandra Day O'Connor said: "If the First Amendment means anything, it means that regulating speech must be a last - not first - resort."

Several cases this term have clarified the government's leeway to limit speech that can hurt the public, while not diminishing people's freedom to speak out, maintaining their First Amendment rights. "Free speech advocates should not despair," said Seattle University's School of Law professor David Skover, adding "There is no reason to believe future years will not see a revival of solid First Amendment victories."

Share and Share Alike
From's Web Watch comes the story "File-sharers plead for legitimacy."

This week, The Electronic Frontier Foundation launched a new advertising campaign entitled "Let the Music Play," in response to last week's announcement by the RIAA that it intends to begin filing lawsuits against individuals who use file-swapping services such as Morpheus and Kazaa.

With advertisements appearing in popular magazines, the Right to Share campaign is intended to counter stiff opposition from the entertainment industry by encouraging the millions of Americans who are now making use of peer-to-peer file trading networks to demand changes in current copyright laws that would legalize online file sharing.

According to Shari Steele, executive director of the EFF, current copyright law is "out of step with the views of the American public and the reality of music distribution online." and that "rather than trying to sue people into submission, we need to find a better alternative that gets artists paid while making file sharing legal."

Recording Industry Association of America president Cary Sherman, outlining the recording industry's response to the sharp increase in online file trading and subsequent drop in recording industry revenues, claims that "The law is clear and the message to those who are distributing substantial quantities of music online should be equally clear - this activity is illegal, you are not anonymous when you do it, and engaging in it can have real consequences." Consequences that among other things caused the demise of Napster and other 'first generation' services.

"Today, more US citizens use file-sharing software than voted for President Bush," said EFF Senior Staff Attorney Fred von Lohmann, adding that "Congress needs to spend less time listening to record industry lobbyists and more time listening to the more than 60 million Americans who use file-sharing software today."

Celebrity Copyrights
From netimperative comes the news "Amazon sued in celebrity poster complaint."

Corbis, a digital image company, established 14 years ago by Microsoft's Bill Gates and subsequently striking deals with numerous commercial photographers to acquire the rights to millions of images, alleges that online retailer processed unauthorized sales of hundreds of celebrity pictures via its website, and is seeking damages of up to $150,000 for each work sold through Amazon.

Despite the fact that the infringements were the work of some of the 'trusted partners' that are featured on its website, Corbis claims that Amazon is responsible for the sales, to which Amazon countered the claim saying that they are not liable, since they never owned any of the inventory, and are thus exempt from prosecution.

Amazon acted quickly, removing the trusted partners involved in the suspected copyright breach from its website. Along with Amazon, some 25 poster retailers, were named in the lawsuit.

What's XXX-ceptable?
From MSNBC comes an extensive article on how porn has become commonplace in mainstream America.

Boasting annual revenues estimated to be between $5 and $10 billion dollars, including 750 million adult video and DVD rentals in 2001 alone, America seems to be embracing the world of pornography and bringing it well into the mainstream.

Initially entering the home market with the first videocassette recorders in the 1980s, adult entertainment has blossomed in the 1990s, due to the widespread availability of video-on-demand services, phone sex, and the Internet. According to sociologist Pepper Schwartz, "We've become more comfortable with sexual information in the general culture, but it's not a change in our basic values. We're just lightning up a little bit about sex."

The Web, more than anything else, is responsible for the increased visibility and acceptance of porn in American households due to the anonymous nature of 'Net surfing. With advances in technology and broadband Internet access becoming more widespread, the online pornography business boomed; with analysts estimating that 100,000 adult Web sites bring in $1 billion dollars annually.

Beyond the Internet, satellite, cable, and video-on-demand provide adult entertainment straight to consumer's living rooms, and hotel rooms, with adult titles being viewed 10 times more often than 'standard' titles by business travelers. But just as these new porn technologies have seen explosive growth, more traditional venues, such as magazines, have declined, with former power-house publishers Playboy and Penthouse losing millions of customers.

Of course, some folks welcome any decline in the porn industry. According to Bruce Taylor, president and chief counsel for the National Law Center for Children and Families, "When you smoke pot as a kid, or get someone to buy you beer, you know it's wrong. Same with porn... If you stop thinking it's wrong, it stops affecting your values system. That's dangerous."

Bruce may be in the minority, however, as Adult Video News founder and president Paul Fishbein is in talks with mainstream television networks about airing the annual AVN Awards show. Historically broadcast on the Playboy Channel, this gala event is seen as "the Oscars of porn," and if negotiations are successful, their broadcast will usher in a merger of porn and pop culture that could redefine "The American Way."