Free Speech Coalition: Mainstream Legal Titans Speak to Porn Notables in Historic Summit

but do they make a sound?

UNIVERSAL CITY, Calif. — I am in the elevator hurtling 17 stories to the top floor of the Universal Sheraton. It is a signal day in the three-year history of America’s adult entertainment industry, which I founded with the launch of this website.

Beautiful women flood the lobby, but this is a red herring. They are here for the Paul Mitchell seminar elsewhere in the hotel.

“How to Survive and Thrive in the Digital Environment … From the People Who Know” is a day-long series of panels, salads, law firm promotional leaflets, and three different kinds of sugar for the bottomless urns of coffee available just within reach of the speakers’ platform. And I am Here, and this is Now, and the people in this room will remember this day Forever.

Because today is the day when mainstream legal and technology experts from law firms and entertainment companies turn their bright and benevolent faces to the adult industry, so that we may be Inspired and Instructed.

***

What I didn’t understand before I came was that this was essentially a chance for various adult business types (no performers were there) to hear people from other disciplines talk about their own anti-piracy solutions, or their hopes for solutions. I had heretofore thought that sponsoring organization the Free Speech Coalition had offered attendance to concerned professionals from every field, thus removing the stigma of “adult.”

In other words, I thought the FSC was throwing a big Piracy seminar for everybody, and would thus score points with the non-adult attendees who’d see that porn wasn’t so bad after all.

But Nope. The audience was the same people I see every day.

Why this is significant became apparent with the first panel discussion, “Technology Show And Tell – Copyrighted Content’s Best Friend Or Worst Enemy?” hosted by Kelly Truelove, PhD., of Truelove Research and featuring panelists Katherine Fallow and Michael B. DeSanctis, partners in the Washington, D.C. office of Jenner & Block, LLP, and George M. Borkowski, a partner at Mitchell Silberberg & Knupp, LLP.

Truelove spent several minutes demonstrating how easy it was to download the currently-playing movie Madagascar 2 via BitTorrent. He explained the history of quasi- and true P2P file sharing operations and how they evolved to be decentralized networks to skirt litigation.

“No one component of the system is in itself illegal, they (pirate sites) believe,” Truelove said, “so they learned from Napster’s example to decentralize.”

While this was worthwhile information, I have a feeling that 90 percent of the audience already knew how to torrent something, and the 10 percent who didn’t couldn’t follow the demo. What learning how to pirate something did not do was to teach how to stop it.

The morning panels were mainly theoretical and what emerged was a calm discussion about how piracy works and how people have litigated it.

One means of bringing charges against pirate sites was to establish the sites’ intent to transfer copyrighted material, DeSanctis said.

“The ease with which users can download (copyrighted material) from pirate sites and how those sites facilitate and induce downloading are part of proving a pirate site’s (culpable) intent,” he said.

But this was not helpful to me personally. It seemed like a summary of what most of the room already knew, and couldn’t be applied to the pressing need of keeping adult content from being pirated.

Once the stuff is on the web, panelists mentioned, there are established and less mature means of tracking that content, such as acoustic and visual fingerprinting. But it was also noted that producers would have to submit their content to be fingerprinted and to be registered with one of (many?) fingerprinting services. I wondered if any in the room were thinking, “That sounds like too much work.”

The next program, “To Sue Or Not To Sue And What’s To Gain?” was moderated by Steven A. Fabrizio, another partner at Jenner & Block, LLP. He hosted panelists Harvey W. Geller, Deputy General Counsel and Senior Vice President of Business and Legal Affairs at Universal Music Group, Steve T. Kang, Vice President of Anti-Piracy Legal Affairs at NBC-Universal, Alasdair McMullen, Executive Vice President of Legal Affairs at EMI Music North America, Gill Sperlein, General Counsel of Titan Media (an adult gay company and the only representative from the adult industry in the morning session), and Borkowski again, who liked the first panel so much that he stayed around for the second.

This one was a little more helpful in that it established piracy as an industry-specific concern. The videogame business, one panelist said, was such a young industry with content (perhaps) so difficult to pirate that it was not a common litigator. Further, another panelist noted, only if “people who sometimes pirate and sometimes don’t” is added to “people who always pirate” and “people who always buy” should there be a course of litigation because “you don’t want to end up suing your customers.”

Geller was asked how his firm decides to sue.

“That’s a trade secret,” he said.

“We’re among friends,” Fabrizio replied.

But surrounded by perceived enemies, I was soon to find out.

At this point I was pulled aside and asked, gently, to not write this story for a non-adult publication, because the morning panelists were antsy about their names being associated with adult in a mainstream publication.

It was furher pointed out to me that filming was not permitted in the morning session, either, lest the mainstream panelists be seen hobnobbing with filthmongers.

I found this ricockulous. “Their names are on the FSC’s website,” I said. “Anyone running a search can find their names associated with this seminar.”

I wasn’t sure that people who probably accepted some kind of honorarium in addition to the free coffee should then not want to be publicly associated with their hosts. Free speech and all. Oh well.

I went back inside.

Talking about getting tough with pirates, Kang was saying that graduated responses, like warning letters to illegal downloaders, need to be followed up with graduated sanctions or they won’t be effective deterrents.

Sperlein pointed out that many sites use pirated content to jumpstart traffic and then, if ever, scale back. Geller said that many Hollywood movie pirate sites are notable for not featuring adult content, and that coincidentally makes them easier to go after for improperly filtering other copyrighted content, saying “if you can hire someone to weed out the adult stuff you can’t say you didn’t have the means to filter out the rest.”

There seems to be no concern whatsoever about peer-to-peer piracy of Wendy Wasserstein plays.

The final panel of the morning session was moderated by DeSanctis and featured the panel-sitting talents of Dean Garfield, Executive Vice President and Chief Strategy Officer of the MPAA, Lawrence A. Kanusher, Executive Vice President, Business and Legal Affairs of the Global Business Group of Sony BMG Music Entertainment, David P. Kaplan, Senior Vice President and Intellectual Property Counsel of Warner Brothers’ Worldwide Anti-Piracy Operations, Davd Ring, Executive Vice President of Business Development & Business Affairs, Universal Music Group & eLabs, and Steven R. England, yet another partner at Jenner & Block.

“Is Mainstream Entertainment Making Money In This New Environment?” was the title of the panel.

“Yes, But We’re Freaking Out, Too” was the answer to the title.

It was fitting that a morning spent discussing our common money hemorrhage would end with an emphasis on how to make more of it.

The panel seemed to agree that the multiplicity of possible content portals was not a strain. “The easier it is to buy what you see or hear, the more money the owner of that content makes,” no one on the panel said, but should have.

I asked whether the pursuit of myriad new tech-based revenue streams that might prove buggy or temporary yielded a net gain. Myself, I can only pursue a risk so far before I need some proof that it will make money. How to do this for dozens of new media?

No one seemed to advocate anything other than follow every rabbit down every rabbit hole.

The bottom line of the third panel, said Kanusher, is to make money from everything one does.

“Yes, we know this,” thought everyone in the room.

But there was unresolved anger in the room.

“When will people realize that pirate sites are fencing stolen property?” giggled Jeff Mullen of AllMediaPlay.

The big event of the day found Tom Hymes, peripatetic porn employee, moderating a panel with Vivid founder Steven Hirsch, who walked across the street from Vivid’s offices, and Scott Coffman, founder of Charlotte, N.C.’s Video On Demand pioneer AEBN.

This was the best panel because of the history of the two companies represented, the actionable ideas expressed, and the active disagreements between Hirsch and Coffman.

Last year Vivid sued AEBN property PornoTube for illegally hosting Vivid content. PornoTube is, as the name suggests, a “tube” site that, like Youtube, hosts user-generated content. At issue in the suit, of course, was that the UGC was in fact ripped from Vivid DVDs. The companies came to a settlement but, Hirsch said, this wasn’t the end of the problem.

“AEBN has a vested interest in this industry,” Hirsch said. “Many of the other tube sites do not. He (Coffman) is working with us, not against us.”

Hirsch founded Vivid in 1984, and the company originated what became porn’s contract star system, a callback to Hollywood’s Golden Age. But Hirsch compared porn’s piracy problems not with Hollywood’s but to those of the music industry, which used to sell whole albums but now parcels out singles for either .99 or, just as often, pirates do it for free.

Where porn fans used to buy whole movies on VHS or DVD, now sites are clipping them into pay-per-minute segments which are just as often available gratis.

Hirsch and Coffman, sitting side by side, both agreed to having learned something from last year’s legal tussle (I speculate that the suit was dropped rather than resolving in a financial settlement). Coffman said that Pornotube now vets its submissions better and Hirsch, echoing sentiments from earlier in the day, not only said that he’d come “full circle” in his feelings about tube sites, but now wanted to make the sites work for him rather than try to crush them.

“If we can bombard a site with three-to-five-minute clips that send everyone back to Vivid.com,” he said, “it’s better than having somebody else posting whole scenes.”

Both men provided details of the adult industry’s woes. Coffman noted the high Alexa rankings of content thieves, Hirsch said that DVD sales were down 50 percent from a few years ago and that the 10 percent bump in VOD sales wasn’t making up for the loss. Coffman said, “things have been going downhill for a year and a half,” then said that “Pornotube only does good numbers because it was the first. If I started it now, we couldn’t be competitive.”

Hirsch also implied that losses from piracy were affecting the public’s appetite for quality porn (the kind that only Vivid can provide!).

“People can’t afford to make high quality content,” he said, “and so if (consumers) can get the other stuff for free, they’ll take it.”

“We don’t want to give away what we want to sell,” Coffman said, and this drew a round of applause.

Hymes asked good questions. Reminding Hirsch and Coffman, as leaders in their field, that the porn business as a whole couldn’t resist the temptation to undercut its prices, asked, “Do we only have ourselves to blame?”

“Content producers are so beaten down that they will sell to anyone,” Hirsch said.

Coffman and Hirsch, despite being reconciled, often disagreed on how to fix things. This was refreshing in that each proposed solutions, expressed frustration, and connected with the audience in doing so.

Hirsch suggested a TV model – free porn – with intermittent advertising. Coffman said that no one would click over to an advertiser and buy something that the viewer was currently getting for free.

Earlier in the conversation Coffman said that there were only a “handful” of advertisers sponsoring most of the tube sites. He mentioned this in terms of possible litigation targets. But this also was important because, just as with the reluctance the morning speakers had for being outed as participants in a porn seminar, willing advertisers were few and did not offer the range of products that would make a TV delivery model worthwhile.

Then Coffman said, “I see no way that more than one company – maybe Steve – can survive.”

On the whole, Hirsch appeared more hopeful, speaking (I’m speculating again) as one who knew that, however bad things were for everybody, he had his ducks in a row. He is a second-generation porn mogul.

“I come from a place where we deal with the distributors, we figure out how to get DVDs for .10 less, we send our invoices, and sometimes we get paid faster than others. But now it’s about diversification. You can’t be so dependent upon one revenue stream.”

One bright point, Coffman said, was that he is no longer besieged with people asking him how to get into the adult business.

“Why do we want new people to come into our industry?” he asked. “Why can’t you just stay out?”

Today’s seminar comes at the outset of the mini-convention Webmaster Access West. I may or may not be talking abut that tomorrow, depending on people calling me back. This won’t be another Phoenix Forum.

Previously on Porn Valley Observed: FSC files for another extension; “You’re no Senator Billy“; Night of the Stars recognizes freedom, snacks
See also: Free Speech Coalition