Grokster v MGM: The End or the Beginning?

By Jon Newton 6/20/05

The US Supreme Court is about to announce its verdict on Grokster v MGM through which the entertainment and software industry cartels claim they're being devastated by thieves who use the p2p networks to upload, download and share files online.

Grokster v MGM represents Hollywood's current effort to have previous rulings overturned. For the third time. Its constituents want to use the weight of the American judicial system to crush the commercial and independent p2p companies, and the people who use their products, to suit vested corporate interests.

Jon Newton

The court will probably come out in favour of Grokster and StreamCast Networks and, by default, anyone and everyone who wants to be able to develop the arts, products and services without interference from the corporations.

"A ruling in favor of the music industry is likely to expedite the process of existing P2P operators attempting to convert to legitimate offerings, many of which would be potential Snocap clients," says Reuters' June 17 P2P sites prepare legit bows.

It goes on, "A ruling in support of P2P networks is likely to mean even more label spoofing tactics and other anti-piracy strategies that compromise the quality of P2P search results. In that scenario, P2P operators looking to offer their users a better experience may turn to commercial solutions."

What will this mean in real-world terms?

Very little.

Grokster v MGM represents a cause, not an effect.

Cheating and thievery

The music, movie and software industries say file sharing is theft. To 'steal' means to take something away without the owner's permission. But with file sharing, nothing has been stolen and no money changes hands. The items shared, digital files, have almost always been bought and paid for through normal retail outlets.

With counterfeits, examples of the billions of CDs and DVDs on the legitimate market are faked and sold as the real thing, or as duplicates. This criminal activity does indeed cost the industry in lost sales. And money does indeed change hands.

But counterfeiting, or piracy, as the cartels call it, has nothing to do with p2p file sharing. Nor are file sharers criminals in any sense of the word. Industry 'press releases' nonetheless never fail to mention the two in the same breath.

Carefully crafted creative statistics and surveys purport to 'prove' file sharers, crooked to a man, woman and child, are undermining the fair and honest entertainment and software companies as they struggle gamely to survive in a climate of digital crime. The puff pieces say the companies have only consumer interests at heart.

However, the industry studies, misrepresented as being independent, are usually heavily, and obviously, skewed to towards the corporate point of view. Consequently, the statistics they contain are widely questioned by such as Britain's The Economist and numerous academic and other studies which make it clear there are no grounds for claims that file sharing has resulted in the loss of even one sale.

The cartels, though, say millions upon millions of people around the world get up every morning, bent on cheating and thievery.

The industry-owned MPAA (Motion Picture Association of America) and RIAA (Recording Industry Association of America) say that by suing these milllions upon millions of crooks and villains - their owners' customers - they're significantly reducing the incidence of file sharing and making the world safe for 'honest' people.

Put like that, it seems unreal.

And it is.

Lying psychopaths

If you haven't seen The Corporation, a genuinely independent Canadian documentary, make sure you rectify that soon. You won't have any trouble finding it online, and you can visit the site here.

One of its principal points is: corporations started out as organizations set up for very specific purposes. When they'd completed their tasks, they were shut down. However, today they're regarded, quite legally, as 'people' the same as you or I. They have all the concomitant benefits and advantages that implies, but none of a real person's responsibilities.

If, says the documentary, corporations are legal people, existing psychiatric classification methods would diagnose them as lying psychopaths with no sense of right or wrong and congentially unable to distinguish reality from their own fictions.

The multi-national corporations have been able to acquire their power and wealth because historically, they've been able to lie and steal, and even commit murder, and get away with it in the name of their shareholders, the only people to whom they answer.

The tendency is to see the events unfolding in the world of corporate entertainment, as the inter-linked entertainment and software companies try to bring their consumer bases to heel, as centering on copypright issues. However, they're but the visible manifesation of a steadily building tsunami of customer discontent.

Mindless cash-cows

Far from being mere vehicles of entertainment, the Hollywood cartels are the means by which world corporations manipulate the consumers upon whom they (the corporations) depend for their existence.

They directly or indirectly control the principal mainstream on- and offline print and electronic media outlets through which trends are started and belief sets influenced.

Hollywood, and its counterparts around the world, creates the illusions that it's cool for men to have three days of stubble and wear their pants around their ankles, and for women to pump their breasts full of silicone.

And so on.

The cartels use the media and movies to implant desirable (to the corporations) suggestions and behaviour patterns on behalf of their fellows in all the other industries.

It's an unimaginably complex, world-wide con game.

And you're the mark.

Lies and tricks

In the last decade, people went from being customers with choices to 'consumers,' mindless cash-cows who swallow everything the corporations dish up, no questions asked. And the corporations need to keep things that way.

Who's in charge? Ostensibly, politicians. But 'politician' is synonymous with 'liar'. And increasingly, politicians are elected not by the people they're supposed to serve and represent, but by the vested corporate interests which keep campaign chests stuffed with money, and who make sure re-electons occur on schedule.

And businesses answer not to the public, but to their shareholders.

Military commanders act for the governments which are in turn controlled by the corporations whose thirst for the oil and other commodities used to keep them in business - at your expense - is insatiable.

What's happening is often described in the mainstream media as a war. But there's no war. Instead, the studios and labels, behind whom lurk the international corporations, are struggling to survive. They are, however, fast losing ground. And they know it.

Because along came the Net and through it, individuals and groups are taking back their power.

People power

The people who run the cartels are stumbling blindly around, trying to use physical 20th century business models in the digital 21st century. They religiously employ PR propaganda concepts originally developed in Germany during WWII to push their agendas. It's the dripping tap principal. Tell your lies often and loudly enough and they'll eventually be accepted as facts.

This worked as long as the media controlled by Big Business were the only means by which the ordinary person was getting his or her information.

However, that changed the instant the Net fell within reach of every man, woman and child with a computer and an ISP account. Thanks to the Net, blogs and the ability to use p2p to instantly move files around the world, you and I can completely by-pass the mainstream media and get our information from reliable sources: other people like us.

People Power, talked about in the 1970s but which was hardly more than a phrase with a nice ring to it, has come of age.

What are we afraid of?

Peer-to-peer file sharing isn't theft. It's the most powerful protest the world has ever seen.

What do the entertainment cartels threaten us with? That there won't be any more music? (Their music.) That there won't be any more movies? (Their moviers.) That there won't be any more cool games or killer applications? (Their games and software.)

Wouldn't it be terrible if we were forced to revert to performances and art from people who, for the first time in history, don't have to go through the cartels to be heard and seen?

File sharers aren't pirates. The corporate cartels enjoy that role. They're pillaging and plundering like there's no tomorrow because for them there IS no tomorrow. Their time has come, their day is done and Grokster v MGM is no more than a manisfestation of that.

Big Music and the seven major film studios accuse file sharers of being thieves, although nothing has been stolen and no money has been lost.

The real criminals and crooks hide behind their desks and teams of expensive lawyers. When they're caught red handed lying and cheating and bilking clients out of billions, they spend a little time in federal holiday clubs at tax-payer expense before hitting the lecture circuits where they're paid top dollar to explain how they swindled the people who depended on them.

The greed flaw

As they are now, the labels, studios and software firms, among others, are unsustainable. And they know it. And ironically, they've brought themselves to this pass by refusing to accept the Net and p2p.

Towards the end of The Corporation documentary, Michael Moore explains how he's able to survive and continue to make films which prove just how corrupt and dispicable Corporate America really is ----- even though he's "opposing what they believe in" on their dime.

He gets away with it, “because they don't believe in anything,” he says in the documentary.

“They put me on there because they know there's millions of people that want to see my film or watch the tv show and so they're going to make money. And I've been able to get my stuff out there because I'm driving my truck through this incredible flaw in capitalism - the greed flaw, the thing that says the rich man will sell you the rope to hang himself with if he thinks he can make a buck off it.

“I'm part of the rope and they also believe that when people watch my stuff ... ‘they won't do anything because we've done such a good job of numbing their minds and dumbing them down’."

Julie and Jimmy Williams

The MPAA, RIAA, CRIA, and all the other AAs, the financial enterprises, government and law enforcement administrations, the credit agencies and other businesses, etc, etc, depend utterly on IT systems.

Or put another way, they rely on the people who create, run and maintain the computer delivery systems which keep the cash flows flowing, the lawyers in limousines, the executives in silk suits, and the pop stars in luxury.

The 'people' are the sys ops and admins, the techies, the clerks, the line managers, the secretaries, interns, the set designers, make-up artists, the assistant managers, the go-fers, and all the others who exist to both maintain and nourish the corporations.

These are the people who are really in power. They keep the wheels a-turning and the money pouring in.

And when they're done for the day, what do they do? They go to the movies and buy the CDs and DVDs and games and application software packages to relax with so they can put in another hard day's work to keep the fat cats fat and the rich, rich.

Then the latter sue the former for not buying 'product'.

But the Julie and Jimmy Williamses of the offline world are also the millions of Jane and John Does accused of being arch thieves and hardened criminals because they share with each other online.

The visible tip of an enormous iceberg

One hacker brought MasterCard to its knees and one 16-year-old Swedish youth wrought havoc in Europe and the US and with the US military, NASA, research laboratories and IT companies, including Cisco.

The media present these 'cases' as extraordinary, but almost singular, examples of what can happen when hackers go bad.

However, these cases are just the visible tip of an enormous iceberg. Many more successful hacks will have occurred and been suppressed in the interests of corporate security. It's well known than when banks are digitally robbed, they keep the events secret so as not to scare off their corporate customers. The same happens with governments and enforcement agencies such as the FBI which, not at all incidentally, is being forced to revamp its enormously expensive but entirely inefficient computer systems.

Every day more and more people go online to discover they no longer have to listen to vested, self-serving interests.

They find they can tap un-spun information via the blogs and other above- and below-the-surface online information sources. Citizen journalists present the real news, not the disnformation pieces turned out by the traditional media on behalf of the multi-national corporations which control them.

Digitized and sold online

This is the beginning, not the end. And there is no war. What's taken as strife is just the process of radical change occurring.

The entertainment industry currently sells most of its inventory to offline consumers. However, more and more people are logging on every day and eventually, the balance will shift and anything that can be digitized WILL be digitized and sold online, not as physical product.

Quite a few of the existing overheads, such as the money tied up in storage, print costs, enforcement, PR campaigns, etc, will consequently be drastically lowered or cut altogether. This, in turn, will mean more and more people will be buying more and more reasonably priced product via the Net. And they'll be talking about what's good and what's bad in their blogs, in emails, over the VoIP networks, and so on.

There'll be no way for manufacturers to escape the results of releasing shabby product, as they're able to do now. 'Consumers,' as we're still contemptuously known, are sharing information and completely by-passing the old marketing and sales religions.

The apparent success the RIAA, MPAA, et al, are enjoying by suing the ordinary men, women and children who share music online, serves nicely to obscure the reality that they're making little headway against the organized criminals - and nor will they as long as they deal with physical product in a digital world.

The 'pirates' are far more advanced than both the entertainment industry and the national police and enforcement units that cynically act for them.

And that's the way it'll stay until the labels, studios and software makers smarten up.

The vulnerable under-belly

It takes just one Jane Doe way down in the computer room to decide she's had enough of being treated like dirt. It takes just one John Doe coding the app which keeps the spread-sheets in shape to decide he doesn't want to be treated like a criminal when he hasn't done anything wrong.

There's no war going on. This is progress and Grokster v MGM won't decide anything much, whichever way it goes.

DRM is being proferred as a solution. But "Digital files cannot be made uncopyable any more than water can be made not wet," as Bruce Schneier says.

The MPAA and RIAA will keep on treating their customers like scum and the customers will continue to protest by downloading from the p2p networks instead of buying over-priced, shoddy product.

The FBI and DoJ will take care of them?

For now, perhaps. But remember who really runs the FBI and DoJ.

That's the soft, vulnerable under-belly of the mega corporations.

P2p technologies will become the primary backbone for communications in this century. Thousands of new people are going online every day meaning for the first time in history, 'we' have a voice 'they' have to listen to.

Grokster v MGM? It doesn't matter. An independent parallel communications portal has already developed. And it's going mainstream.

People tend to think of the music/movie file sharing thing as separate from 'important' world events. However, sooner or later, what's happening in this arena will inevitably also happen elsewhere.

A critical mass is very close to being reached and when it gells, there'll be a reckoning.

Stay tuned.


Jon Newton is the editor of and is a regular contributer to MP3 Newswire. Jon's site is devoted to the politics of digital music and his insights as well as those of his co-writers can be read there. We urge you to explore it.


The Sony PSP is available on Amazon

Other MP3 stories:
MP3 Players for Summer 2005 Part I
MP3 Players for Summer 2005 Part II
Sony PSP As Personal Media Player - Review


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