Film88.COM e-mailed me a notice this morning asking that I read the the following open letter on their website. I’m posting the text here because I have no idea how long that site will be operational —

Dear Valued Users and Geeks,

Film88.com


This epilogue is worth a little discussion.

The first issue would ultimately have caused the business to fail if no adequate solution was ever found. Technology for streaming media has existed for quite some time, but not with the wealth of content that Film88 was pushing out to users. With a price of $1 per movie, they could have anticipated a huge number of users on the service. Movie88.COM, their predecessor, saw this also. I recall watching one or two of the free movies and noticed that several times the site was just jammed. There are probably other technical issues, some likely related to maintaining the content and the processing power required to deliver it at various bandwidths, that will also have to be resolved. But that’s cool — this is emerging technology and those glitches are to be expected.

Their second point on payments comes closer to the heart. A service like this without major studio participation will almost certainly fail. I believed that Film88 was being truthful when they indicated that they were not pirates. Many disruptive changes occur because individuals and businesses are willing to take a chance on pushing their ideas into the market and dealing with the consequences later — sort of the “don’t ask for permission, just ask for forgiveness”. Film88 and Movie88 are examples of that. Frankly, so was Napster (now dead). The original video rental stores were also of that very same ilk.

I believe that these guys should keep trying because at some point, with the right combination of pieces, they will be able to force Hollywood to the bargaining table. I’ll actually go a bit further and state that if someone like Film88 doesn’t achieve sustainability, then the next thing we’ll be seeing is a personal computer that has a rigid set of restricted capabilities, unlike the computers we use today. Hollywood and the record industry would like nothing better than to see the general purpose computer go away in favor of a more expensive appliance that only shows their brand of copy-protected content. The video stores stayed in business because of Macrovision, a technology that makes it hard to copy video cassettes; don’t think that the MPAA and RIAA wouldn’t like to make it so that CD-Rs and DVD-Rs are unusable for their content. And the way that they’ll do this is by forcing computer manufacturers to stop producing computers that can be used for a variety of tasks. The computers in the future will be like audio/video components and we won’t be able to load new software onto them.

Now to point three. I’m not sure which category I fall into — I presume that they think of me as a fair journalist since I continue to be on their e-mail list (although I think I fit the Geek category best). I understand Film88’s statement about not being involved in politics and the borderless Internet, but there are some realities that have to be considered. Iran is not a friendly nation to the US — President Bush has declared Iran to be part of the “Axis of Evil”. I’m not going to make any statements about whether I think the President is correct about that, but on a personal level, I found the choice of countries to host the service to be a little troubling. My main concern, expressed in my first comments on Film88, was that this was a means for US dollars (and other money) to flow into Iran. I’m sure that there would be taxes paid by the business to the Iranian government (like in any country, although I am unfamiliar with Iranian tax law), and so in an indirect way, my consumption of a service like Film88 would be aiding a country that I’m not so sure I want to support. I’d have a similar problem if the service were in Libya or Iraq or Syria or North Korea.

I’ll take Film88 at their word that politics didn’t play into choice of country and certainly nationality and race don’t play into this for me either. I do wonder if the current political situation in Iran with respect to the US might have made Iran more eager to help Film88 succeed. Would Iran benefit if suddenly Hollywood were robbed of its profits? Maybe. The loss of Hollywood revenue would cause less tax dollars to flow into the federal and state governments. That might have an impact on the US economy. Considering how Western culture (like film) is viewed in Iran, it certainly made me wonder why they would allow a web business that does nothing but sell (inexpensively) Western culture. So while Film88 might not have been engaged politically, I don’t doubt that someone clever in the Iranian government decided that there might be some political benefit to Film88 being in Iran. (If the folks at Film88 would like to send me some comments on this, I’d be happy to work them into another post.)

So the Internet is zero for two versus the MPAA. The RIAA has their hands somewhat because the bandwidth requirements for moving songs around in the form of MP3s is a managable problem and decentralized solutions Limewire, Kazaa, and Morpheus are essentially uncontrollable — there’s no one site to shut down. Anyone with a 56k modem can download music without too much extreme pain. Motion pictures are much larger and it still takes a long time to download a gig or two from the net. That will change as more households get high bandwidth connections. People are already starting to download movies from some of the services that were originally just moving MP3s around.

Again, I’ll state that I think it’s time that the MPAA legitimize Film88 or something very much like it. Bits played through Real Player are fairly hard to capture and redistribute. There are some tools that help you do it, but basically it’s something of a pain in the neck to install and use. And even then, you have to watch the entire 2 hour movie before you could even attempt to redistribute it. Considering the relatively low quality of the movies that can be delivered through the Internet (Film88 was attempting to go as high as 500k, which is still much lower than VHS quality), a low price service would keep the copying to a minimum. It’s the video rental effect — you can rent a tape or DVD from a video store and most of us don’t bother copying them because it’s more trouble than it’s worth. Macrovision, while not perfect, ended up being good enough to stop people from copying every tape they rent. People who rent DVDs do so because they want the quality and won’t bother taping the motion picture for later viewing. Streaming media has very much the same effect — it’s too technically complicated for most people to bother with and for a dollar or two, no one will want to spend the time to copy and redistribute a low quality film.

So here’s a message for Jack Valenti — you’re sitting on a huge opportunity here to bring motion pictures to the net in a way that you would actually make money and not harm your existing businesses. It is beginning to look like you’re digging in your heels because you think you can rather than engaging with these folks. That’s going to be counterproductive for you in the long run because if you don’t allow one of these services to exist, then someone will eventually set up a service that you can’t control and when that happens, you will lose.