It is time for the entertainment industry to strike back

08/10/2011 - 11h20

Robert Levine was editor of "Billboard" music magazine and had worked for "Wired" technology magazine. He believed the music industry and content producers in general should make their products available online for free. That was before he noticed that technology companies grew making profit with the same products, but did not want to pay for them.

Michael Chia/Divulgação

Robert Levine, author of "Free Ride"

He started "following the money" and found out that institutions that defend making everything available online are funded by the same technology companies. He also found out that Creative Commons received US$ 1.5 million from Google in 2008 and US$ 500,000 in 2009.

The result is the book "Free Ride", which gives details of "how the internet is destroying the entertainment industry" and suggests "how to strike back" in its 320 pages. The book was published in the U.K. two months ago, praised by the "Financial Times" and reviewed with restrictions by the "Independent"; the book will be published in the U.S. on October 25.

Here are some excerpts of the interview he gave over the phone:

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Folha - In your book, you wrote that the conflict around the internet is not between activists and media companies, but economic, between technology and media and content companies.

Robert Levine - That was my main point. People see those issues in terms of good and evil. When you have companies, they tend to act according to their economic interests, making money. When we talk about the internet, we are talking about major providers such as Verizon, At&T, and also Google, Facebook. But activist also talk about blogs: "It's us against the big media companies." But, compared to Google, the music industry isn't big anymore, and, compared to TV companies it's quite small. People say: "the music industry is influential in Washington." It is nothing compared to Google and technology companies.

Where did you start?

I used to work for "Wired" a long time ago, and I believed record labels were backdated, blocking progress. After a while I thought: "Wait a minute, a lot of these internet companies don't want to pay for content." Napster still had a plan for paying for content. It wasn't good, but it was plan. The idea always was to write a critical book, but not as much as it turned out. I found out about all the money activists were receiving. There's a phrase in American journalism, "follow the money," I'm not sure where it came from, but appeared during Watergate.

The origin was the film's script writer [William Goldman].

Exactly. "All the President's Men." Ok, you know your pop culture. I believe that is what you do as a journalist: you follow the money. And I examined Creative Commons and [its founder] Lawrence Lessig, Stanford University's Center for Internet and Society, New America Foundation. Many people told me, "they are nice, good people." They probably are, I don't think anyone is pure evil. I think evil is killing someone, not infringing copyright. But they are biased.

Those institutions are partly funded by technology companies.

Yes, a lot of the funding comes from technology companies. And what is interesting, is that people don't know about it. There is nothing in the newspapers. How come these activists receive all that money and no one says anything? I spent six months researching the book's basic idea. I became more and more surprised. I started thinking: "It's a business conflict: Will Google or Warner control music distribution?" I don't think that record companies are good and Google is bad, because I'm a business journalist. But I believe some of those activists Several days ago, I had lunch with one in Berlin and he didn't know where the Creative Commons' money came from. Isn't that strange?

Here in Brazil, Gilberto Gil didn't know either.

It's funny that you brought up Brazil because there were two countries that I wanted to visit, but I couldn't because I didn't have money: Brazil and Nigeria. I'm a music nerd, I started in music journalism. Both Brazil and Nigeria had great music scene in the 1960s and '70s. Tropicália, Gil, Caetano Veloso, Os Mutantes. In Nigeria, Fela Kuti, Tony Allen, Afrobeat. Most of them were financially supported by record labels. Gil was supported by Philips.

A major label at the time.

Which later became Polygram, and now it is part of Universal. But today people say: "In Brazil, there is that great "tecnobrega" scene, and it doesn't need labels." Yes, but it doesn't make any export profit for Brazil. All those records by Gil made profits for Brazil. That's why I wanted to go, because you have this idea that the developing world should be against copyright. I don't believe that is correct.

Gil and other artists like Radiohead try to use free distribution through the internet. What's your opinion on this attempt to build bridges?

What Radiohead did was really clever. They made even more money with the album they gave out. They let you pay the price you wanted, made a lot of money and promoted their tour. It was really smart. On the other hand, Radiohead could do it because they were already famous. And they were already famous because, in my opinion, they are one of the most talented bands there are, and because EMI promoted them a lot.

For starters.

In the beginning. There are a lot of talented artists that nobody knows. EMI spent a lot of money telling the world about Radiohead. I believe Philips spent a lot of money telling the world about Gil. I have many of those records, but I don't know the stories so much. But he was in Brazilian television. So, when you become known, you don't need a label, but who will be tomorrow's Gilberto Gil?

The book also deals with the press and TV. It says there were two ways to deal with the internet in the beginning: the first followed the general opinion and made everything available online, like the "New York Times", and the second kept contents closed, like the "Financial Times", which made all the difference. What's going to happen from now on?

The newspaper industry in the U.S. and in the United Kingdom has always been connected to publicity. Ten years ago, the traditional division was 85% of the funds came from publicity and 15% from sales. If you take the U.S., the share of the GDP that goes to publicity hasn't changed much since 1995. The GDP goes up and down, but the percentage is the same. There was this pie that supported newspapers, TV, magazines. Now there is only half the pie. Google and Facebook got the other half. All newspapers and TVs are fighting for the other half. They have to sell the content, there's no other way. I don't know if selling the content will work, but making it available for free won't, not for an ambitious newspaper, which spends a lot of money with its content. "New York Times", "Wall Street Journal", "Zeit", "Le Monde", just a few in each country. Not all newspapers want to cover wars, that kind of journalism, but if you want to be a big newspaper, you have to charge for it.

Is it the same for developing countries?

It can be different in Brazil or India, because their economies are growing. I don't know a lot about Brazil, but when an economy grows fast, the middle-class also grows and there is more domestic expenditure. And when there is more domestic expenditure, publicity really takes off. But it is very difficult to forecast anything, because Brazil is a big country, there are so many differences, São Paulo and Manaus are almost different worlds. But in a developed country, you have to sell the news. I believe people will buy it. I pay US$ 23 a month for the "New York Times". I'd keep paying if they raised the price to US$ 33 tomorrow. People are very sensitive to convenience when they are paying, they want it to be easy, but I don't think they care much about how much it costs. Most Americans pay US$ 60 a month for cable TV. And most shows are very bad.

Hundreds of channels, nothing to see.

US$ 60 for cable or US$ 30 for the "NYT"? For me US$ 30 for the "NYT". Itunes raised the price of songs from US$1 to US$ 1.29 in the U.S. And it sold 13% less songs, but made 20% more. It's very smart, if you are in the business for keeps, it is really something smart.

Why did you write about rights to music, newspaper, movies, but not about patents in general?

One of the reasons ids that patents is a matter of life and death. If you really need some medication and can't pay for it, you can steal it. And I can't say that's something good. But stealing a Led Zeppelin album

It doesn't necessarily save anyone's life.

Wait a minute, it could save mine. But I grew up in Connecticut, there was nothing to do. But they are different things. You can say that the governments of Brazil, or India or Nigeria have a legit motivation. Do you have the right to expropriate American intellectual property if it saves lives? The answer is maybe. But do you have the right to expropriate "Gossip Girl"? "Desperate Housewives"? That's something difficult to defend. If you examine what is happening in the World Organization of Intellectual Property at the UN, a lot of people of Creative Commons and Google confuse the two issues, copyright and patents. They are very different to me, because different things are at stake. I don't think stealing a Led Zeppelin is something terrible, although it seems quite unnecessary to me.

At the end of the book, you talk about different paths from now onwards. One of them would be the growing effort in continental Europe to fight entertainment piracy. Is that a solution?

Yes. The legal differences debated today are very small. Nobody says downloading something you didn't pay for is right. Nobody says posting a movie online is right. All that is being discussed is who should be held legally responsible for it. YouTube says: "You can't sue us, you have to sue the people." Even if it is difficult to guarantee that laws will not be broken, it is important to draw the line with laws that say "hey, that is wrong." Just making the point is already important.

Google has a motto, kind of forgotten nowadays, "don't be evil." But isn't that image changing now that Google and Facebook are so huge?

Oh, yes.

In the book, you say that [editor] Chris Anderson stated in "Wired" that "the web is dead," because it is closing, with Xbox Live and App Store, for instance. Did the bad guys become the major technology companies? Are they the new target?

Yes, but let me put it in context. There have always been two sides to the entertainment industry: the product and the platform. Today Google controls the platform. And internet service providers are a platform. Apple and Amazon have closed platforms. And part of the problem is who has the power, the product or the platform? The product has a lot of power in the traditional media industry. If I'm trying to make you buy cable TV, you are going to want the channel with the best programs. If I have movie theater, I need good films. With the internet, you don't need to pay anything, it's all there. So the question is how to make the platform pay for the product. When Chris says that "the web is dead," one of the things he's saying, I believe, is that a lot of creators of content don't like the internet, because it's a bad way to sell things. The internet was created by scientists to share academic information. For that purpose, it's amazing. But we are no longer using the internet to share academic information. We are using it for banking services, for everything.

For media.

But the internet is only good for sharing information. It doesn't really have a good structure for selling information. Thus, the question: What actions can we take to change the system? Apple has a very good system to sell things. Xbox has a very good system to sell things. You can think videogames are stupid but technically they are a very good system. But Google says: "Wait a minute, you can't change things -- it's immoral." I don't think it's immoral. It's bad for Google's business because there more information goes online, the more money Google makes. It's great for them. But if you also want to make any profit, somebody has to buy your information. We have to create a structure for the system or make rules for a system for more people.

Make rules how?

I'm sorry if this is going to sound pretentious, but I think the question is "Who is in command?" Politicians make rules for the platforms or platforms makes rules for the politicians? I didn't vote for Google. I'm not sure about the American government, but I can vote next year. I'll probably vote for Obama again, but I can vote and you can vote many times. You can't vote for Google of for Apple.

They are there and that's it.

Exactly. One of the things that I like about Europe is that, when the U.S. didn't create rules for Microsoft, Europe did. When the U.S. didn't create rules for Intel, Europe did. I don't believe the U.S. will make rules for Google. Because they are very close to Obama.

Google and other technology companies have held meetings and dinners in Washington lately.

Google gives a lot of money to Obama. Eric Schmidt [Google executive] was a major candidate for secretary of Commerce. How can you have a secretary of Commerce who thinks everything should be free? It's a little strange.

Besides Chris Anderson, Tim Berners-Lee, the inventor of the web, wrote that the internet is in danger because of "islands" like iTunes.

But then I have to ask if it's in danger or if it's evolving. I don't want to go back to buying cassettes and LPs. Things advance and change. We can buy songs in iTunes, in Spotify, but we buy them online. We can't go back. The music industry has to adapt, book publishing companies have to adapt. And guess what? Tim Berners-Lee also has to adapt. Why do all people who defend technological progress want the internet to remain exactly like it was in 1995? Tim Berners-Lee and Lawrence Lessig and all these guys want the internet to stay the same. The internet will grow up, mature.

But Berners-Lee created the web, shouldn't he be heard?

He's a scientist, a very intelligent one. But I don't want a scientist to decide how society should work. He is not qualified to do so. And he should shut up. By the way, I'm not qualified either. It has to be a political discussion. The so-called geek values don't actually have a lot of people's support. Very few seem to agree with Tim Berners-Lee. So, who cares about what he says? He's a genius, but just because he's a computer science genius having very intelligent professors telling us how society works has given us some of the worst economies of the 20th century. If you ask him, "create a structure for society," you will get the U.S.S.R.

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The author of "Free Ride" says the other side is biased, but doesn't he see a conflict of interest? Robert Levine answered that he avoided talking about magazines because that's the area he works in, as he has worked in newsrooms of the "New York", "Wired" and "Billboard", besides contributing with many others.

He says some people criticized him after he wrote the book, calling him a "music industry friend," but he denied it and says that "Record labels wouldn't say that," and that is the reason why he criticized them in articles: "No one in the music industry would call me a nice guy."

The guarantees he doesn't receive any money to give speeches in companies, "as many journalists do today." And says: "Look, my most obvious conflict is that I make a living of writing, it's a real conflict: copyright is my bread and butter. I have a book contract."

He means contracts signed Bodley Head in the U.K. and Doubleday in the U.S., companies that belong to Random House, the biggest book publishing company in the world, part of German group Bertelsmann.

Translated by THOMAS MUELLO