A Final Word On Film88.COM

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,

We wish to announce that due to the following factors, we shall cease the operation of film88.com:-

1. There has been many technical complaints during our trial run. We are satisfied with some technical results but feel that we have a duty to find ways to resolve technical complaints before providing such service. We shall be publishing our technical results soon and open for public discussion for the benefit of everyone on our website.

2. We have made clear many times that we are not pirates. We have proposed to major studios in Hollywood to pay 30% of our movie rental price as copyright compensation. This represents a huge percentage from our gross profit but we feel that a balance between innovation and copyright compensation is important. However, Hollywood has reacted negatively. We have to evaluate this issue. Perhaps we should look for movies outside Hollywood but we hope that Hollywood will some day offer such service. Perhaps we should wait for the development of "Statutory Licence" for the movie industry similar to the Statutory Licence for the music industry in US.

3. Some journalists have given us fair comments while others drag us into politics. We have stated clearly that we are not involved in politics (Iran or elsewhere). What happen to the fundamental concept of Internet of being borderless and not knowing any nationality and race? We are actually more keen in technical comments/reviews and to resolve the copyright issue.

We have no plans at the moment but the innovation must go on.....

We wish to apologize to all users, Geeks, our service providers and Hollywood, and hope that they will accept our apology for inconvenience caused, if any.

We can be contacted at film88@hongkong.com.

Thank you.

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.

And Down Goes The $1 Movie — Film88.COM Shutdown

CNet reports that Film88.com has been shutdown, a second strike by the MPAA. Film88 used servers in the Netherlands because high speed Internet access in the Middle East is hard to come by. Score one for the MPAA, but this won’t last long — do they really think that the Film88 guys won’t figure out how to beat this one?

Jack Valenti — it’s time to cut a reasonable deal. These guys are going to keep at it until they succeed, and when they do, you won’t get a cut of the profits. This is really about greed, pure and simple.

By comparison, when the software industry finally realized that they couldn’t prevent people from copying software, the business strategy changed. I think it’s time that Hollywood recognize that this is going to continue and it’s going to get harder and harder to beat these guys. They would have been happy paying $0.25 per film viewed. With the qualities proposed (100k to 500k), that wouldn’t have been a bad start.

$1 Movies — CNet Picks Up The Story

You heard it here first, but the full story is now posted on CNet. According to CNet, the Film88 guys are not the same ones as the Movie88 people — they did hire some of the folks who worked on Movie88. However, I was correct in identifying the location of the business — Tehran, Iran. More as the story develops.

The $1 Movie Returns

It seems like the Movie88 guys have new life in the form of Film88 (www.film88.com). I received the following note in my e-mail this morning from them:


Hi,

We, Film88.com, are pleased to announce that we are reviving the concept and technology of the 1-buck-movie on the net, the online movie rental of US$1-00. For a start, we are offering about 1,500 online movies streamed (without downloading) at 100k, 300k and 500k. As a soft launch, we are now giving away FREE US$5-00 for any user who registers with us (no email or credit card particulars required and no geographical limitation)) - for a limited time only. Even without registering, users can watch online FREE full lenght movies daily.

Film88 is attempting to provide the broadband users with a revolutionary broadband product. This will surely help to promote broadband usage worldwide.

For more info of our site, please visit our FAQ section and feel free to contact us. We also have a special journalist section to enable journalist to submit their questions/interviews to us of which we will try to reply promptly.

Please support this innovation ...

Best Regards,

Film88

And now for some really fascinating information. I did a traceroute on the website to see where they had moved the service, but no reverse name records existed, making the task of finding them difficult. However, the WHOIS record is as follows:


Registrant:
Hami, Hali (QSFENHTSUD)
216 Ostad Nejatollahi Ave.
Tehran, Iran 1598751314
IR

Domain Name: FILM88.COM

Administrative Contact:
Hami, Hali (ZARYJOHMEI) film88@hongkong.com
Hami,Hali
216 Ostad Nejatollahi Ave.
Tehran, Iran 1598751314
IR
98218903252 123 123 1234
Technical Contact:
VeriSign, Inc. (HOST-ORG) namehost@WORLDNIC.NET
VeriSign, Inc.
21355 Ridgetop Circle
Dulles, VA 20166
US
1-888-642-9675 fax: - namehost@worldnic.net

Record expires on 18-Apr-2005.
Record created on 18-Apr-2002.
Database last updated on 4-Jun-2002 08:48:36 EDT.

Domain servers in listed order:

NSIR1.FILM88.COM 213.29.62.33
NSIR2.FILM88.COM 213.29.62.36

So it looks like the services has moved from Taiwan to Iran, a country that (obviously) doesn’t respect US copyrights. Frankly I’m not that pleased about this development and I think that the US Government and the MPAA ought to rethink this pretty quickly. Do you really want US dollars heading out to Iran? If I were the US government, I’d pressure the MPAA to do a license deal with someone quickly and move the service. Talk about going from the frying pan into the fire. The MPAA braintrust has actually made the situation worse for the world and has left themselves virtually no recourse. There is very little pressure that the US government can put on Iran to cause the service to shut down — the only real option is to try to make a deal with the individuals running the service — give them their due and let them operate legally.