“PROPERTY”

Chapter Eight: Transformers

In 1993, Alex Alben was a lawyer working at Starwave, Inc. Starwave was an innovative company founded by Microsoft cofounder Paul Allen to develop digital entertainment. Long before the Internet became popular, Starwave began investing in new technology for delivering entertainment in anticipation of the power of networks.

Alben had a special interest in new technology. He was intrigued by the emerging market for CD-ROM technology - not to distribute film, but to do things with film that otherwise would be very difficult. In 1993, he launched an initiative to develop a product to build retrospectives on the work of particular actors. The first actor chosen was Clint Eastwood. The idea was to showcase all of the work of Eastwood, with clips from his films and interviews with figures important to his career.

At that time, Eastwood had made more than fifty films, as an actor and as a director. Alben began with a series of interviews with Eastwood, asking him about his career. Because Starwave produced those interviews, it was free to include them on the CD.

That alone would not have made a very interesting product, so Starwave wanted to add content from the movies in Eastwood's career: posters, scripts, and other material relating to the films Eastwood made. Most of his career was spent at Warner Brothers, and so it was relatively easy to get permission for that content.

Then Alben and his team decided to include actual film clips. “Our goal was that we were going to have a clip from every one of East-wood's films,” Alben told me. It was here that the problem arose. “No one had ever really done this before,” Alben explained. “No one had ever tried to do this in the context of an artistic look at an actor's career.”

Alben brought the idea to Michael Slade, the CEO of Starwave. Slade asked, “Well, what will it take?”

Alben replied, “Well, we're going to have to clear rights from everyone who appears in these films, and the music and everything else that we want to use in these film clips.” Slade said, “Great! Go for it.” ¹¹³

The problem was that neither Alben nor Slade had any idea what clearing those rights would mean. Every actor in each of the films could have a claim to royalties for the reuse of that film. But CD-ROMs had not been specified in the contracts for the actors, so there was no clear way to know just what Starwave was to do.

I asked Alben how he dealt with the problem. With an obvious pride in his resourcefulness that obscured the obvious bizarreness of his tale, Alben recounted just what they did:

So we very mechanically went about looking up the film clips. We made some artistic decisions about what film clips to include - of course we were going to use the “Make my day” clip from Dirty Harry. But you then need to get the guy on the ground who's wiggling under the gun and you need to get his permission. And then you have to decide what you are going to pay him. ={ Dirty, Harry }

We decided that it would be fair if we offered them the day-player rate for the right to reuse that performance. We're talking about a clip of less than a minute, but to reuse that performance in the CD-ROM the rate at the time was about $600.

So we had to identify the people - some of them were hard to identify because in Eastwood movies you can't tell who's the guy crashing through the glass - is it the actor or is it the stuntman? And then we just, we put together a team, my assistant and some others, and we just started calling people."

Some actors were glad to help - Donald Sutherland, for example, followed up himself to be sure that the rights had been cleared. Others were dumbfounded at their good fortune. Alben would ask, “Hey, can I pay you $600 or maybe if you were in two films, you know, $1,200?” And they would say, “Are you for real? Hey, I'd love to get $1,200.” And some of course were a bit difficult (estranged ex-wives, in particular). But eventually, Alben and his team had cleared the rights to this retrospective CD-ROM on Clint Eastwood's career.

It was one year later - “ and even then we weren't sure whether we were totally in the clear.”

Alben is proud of his work. The project was the first of its kind and the only time he knew of that a team had undertaken such a massive project for the purpose of releasing a retrospective.

Everyone thought it would be too hard. Everyone just threw up their hands and said, “Oh, my gosh, a film, it's so many copyrights, there's the music, there's the screenplay, there's the director, there's the actors.” But we just broke it down. We just put it into its constituent parts and said, “Okay, there's this many actors, this many directors, ... this many musicians,” and we just went at it very systematically and cleared the rights."

And no doubt, the product itself was exceptionally good. Eastwood loved it, and it sold very well.

But I pressed Alben about how weird it seems that it would have to take a year's work simply to clear rights. No doubt Alben had done this efficiently, but as Peter Drucker has famously quipped, “There is nothing so useless as doing efficiently that which should not be done at all.” ¹¹⁴ Did it make sense, I asked Alben, that this is the way a new work has to be made?

For, as he acknowledged, “very few ... have the time and resources, and the will to do this,” and thus, very few such works would ever be made. Does it make sense, I asked him, from the standpoint of what anybody really thought they were ever giving rights for originally, that you would have to go clear rights for these kinds of clips?

I don't think so. When an actor renders a performance in a movie, he or she gets paid very well. ... And then when 30 seconds of that performance is used in a new product that is a retrospective of somebody's career, I don't think that that person ... should be compensated for that."

Or at least, is this how the artist should be compensated? Would it make sense, I asked, for there to be some kind of statutory license that someone could pay and be free to make derivative use of clips like this? Did it really make sense that a follow-on creator would have to track down every artist, actor, director, musician, and get explicit permission from each? Wouldn't a lot more be created if the legal part of the creative process could be made to be more clean?

Absolutely. I think that if there were some fair-licensing mechanism - where you weren't subject to hold-ups and you weren't subject to estranged former spouses - you'd see a lot more of this work, because it wouldn't be so daunting to try to put together a retrospective of someone's career and meaningfully illustrate it with lots of media from that person's career. You'd build in a cost as the producer of one of these things. You'd build in a cost of paying X dollars to the talent that performed. But it would be a known cost. That's the thing that trips everybody up and makes this kind of product hard to get off the ground. If you knew I have a hundred minutes of film in this product and it's going to cost me X, then you build your budget around it, and you can get investments and everything else that you need to produce it. But if you say, “Oh, I want a hundred minutes of something and I have no idea what it's going to cost me, and a certain number of people are going to hold me up for money,” then it becomes difficult to put one of these things together."

Alben worked for a big company. His company was backed by some of the richest investors in the world. He therefore had authority and access that the average Web designer would not have. So if it took him a year, how long would it take someone else? And how much creativity is never made just because the costs of clearing the rights are so high?

These costs are the burdens of a kind of regulation. Put on a Republican hat for a moment, and get angry for a bit. The government defines the scope of these rights, and the scope defined determines how much it's going to cost to negotiate them. (Remember the idea that land runs to the heavens, and imagine the pilot purchasing fly- through rights as he negotiates to fly from Los Angeles to San Francisco.) These rights might well have once made sense; but as circumstances change, they make no sense at all. Or at least, a well-trained, regulation-minimizing Republican should look at the rights and ask, “Does this still make sense?”

I've seen the flash of recognition when people get this point, but only a few times. The first was at a conference of federal judges in California. The judges were gathered to discuss the emerging topic of cyber-law. I was asked to be on the panel. Harvey Saferstein, a well-respected lawyer from an L.A. firm, introduced the panel with a video that he and a friend, Robert Fairbank, had produced.

The video was a brilliant collage of film from every period in the twentieth century, all framed around the idea of a 60 Minutes episode. The execution was perfect, down to the sixty-minute stopwatch. The judges loved every minute of it.

When the lights came up, I looked over to my copanelist, David Nimmer, perhaps the leading copyright scholar and practitioner in the nation. He had an astonished look on his face, as he peered across the room of over 250 well- entertained judges. Taking an ominous tone, he began his talk with a question: “Do you know how many federal laws were just violated in this room?”

For of course, the two brilliantly talented creators who made this film hadn't done what Alben did. They hadn't spent a year clearing the rights to these clips; technically, what they had done violated the law. Of course, it wasn't as if they or anyone were going to be prosecuted for this violation (the presence of 250 judges and a gaggle of federal marshals notwithstanding). But Nimmer was making an important point: A year before anyone would have heard of the word Napster, and two years before another member of our panel, David Boies, would defend Napster before the Ninth Circuit Court of Appeals, Nimmer was trying to get the judges to see that the law would not be friendly to the capacities that this technology would enable. Technology means you can now do amazing things easily; but you couldn't easily do them legally.

We live in a “cut and paste” culture enabled by technology. Anyone building a presentation knows the extraordinary freedom that the cut and paste architecture of the Internet created - in a second you can find just about any image you want; in another second, you can have it planted in your presentation.

But presentations are just a tiny beginning. Using the Internet and its archives, musicians are able to string together mixes of sound never before imagined; filmmakers are able to build movies out of clips on computers around the world. An extraordinary site in Sweden takes images of politicians and blends them with music to create biting political commentary. A site called Camp Chaos has produced some of the most biting criticism of the record industry that there is through the mixing of Flash! and music.

All of these creations are technically illegal. Even if the creators wanted to be “legal,” the cost of complying with the law is impossibly high. Therefore, for the law-abiding sorts, a wealth of creativity is never made. And for that part that is made, if it doesn't follow the clearance rules, it doesn't get released.

To some, these stories suggest a solution: Let's alter the mix of rights so that people are free to build upon our culture. Free to add or mix as they see fit. We could even make this change without necessarily requiring that the “free” use be free as in “free beer.” Instead, the system could simply make it easy for follow-on creators to compensate artists without requiring an army of lawyers to come along: a rule, for example, that says “the royalty owed the copyright owner of an unregistered work for the derivative reuse of his work will be a flat 1 percent of net revenues, to be held in escrow for the copyright owner.” Under this rule, the copyright owner could benefit from some royalty, but he would not have the benefit of a full property right (meaning the right to name his own price) unless he registers the work.

Who could possibly object to this? And what reason would there be for objecting? We're talking about work that is not now being made; which if made, under this plan, would produce new income for artists. What reason would anyone have to oppose it?

In February 2003, DreamWorks studios announced an agreement with Mike Myers, the comic genius of Saturday Night Live and Austin Powers. According to the announcement, Myers and DreamWorks would work together to form a “unique filmmaking pact.” Under the agreement, DreamWorks “will acquire the rights to existing motion picture hits and classics, write new storylines and - with the use of state- of-the-art digital technology - insert Myers and other actors into the film, thereby creating an entirely new piece of entertainment.”

The announcement called this “film sampling.” As Myers explained, “Film Sampling is an exciting way to put an original spin on existing films and allow audiences to see old movies in a new light. Rap artists have been doing this for years with music and now we are able to take that same concept and apply it to film.” Steven Spielberg is quoted as saying, “If anyone can create a way to bring old films to new audiences, it is Mike.”

Spielberg is right. Film sampling by Myers will be brilliant. But if you don't think about it, you might miss the truly astonishing point about this announcement. As the vast majority of our film heritage remains under copyright, the real meaning of the DreamWorks announcement is just this: It is Mike Myers and only Mike Myers who is free to sample. Any general freedom to build upon the film archive of our culture, a freedom in other contexts presumed for us all, is now a privilege reserved for the funny and famous - and presumably rich.

This privilege becomes reserved for two sorts of reasons. The first continues the story of the last chapter: the vagueness of “fair use.” Much of “sampling” should be considered “fair use.” But few would rely upon so weak a doctrine to create. That leads to the second reason that the privilege is reserved for the few: The costs of negotiating the legal rights for the creative reuse of content are astronomically high. These costs mirror the costs with fair use: You either pay a lawyer to defend your fair use rights or pay a lawyer to track down permissions so you don't have to rely upon fair use rights. Either way, the creative process is a process of paying lawyers - again a privilege, or perhaps a curse, reserved for the few.