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Copyright patrol & moribund business models

Recently, comedian Dennis Leary appeared on TV and poked fun at Mel Gibson’s much reported anti-semitic rant.  Leary did this while extolling the great fielding of Red Sox first baseman Kevin Youkilis, who happens to be Jewish.  if you look for the video on YouTube you get this page, which says "This video has been removed at the request of copyright owner New England Sports Network because its content was used without permission."  Apparently it only had 28 views before it got yanked. 

But the video is still available at this site.  Did that site owner have permission of the New England Sports Network?  Maybe, but then maybe not. Is it because that site is a smaller blip on NESN’s copyright violation radar screen?  A larger question is what did NESN achieve by having the video pulled from YouTube?  Obviously, they protected their intellectual property.  But are there hidden costs associated with this action?  Maybe not, but it might be that the hidden costs are hard to see, especially if you aren’t looking at the trendlines.

Seeing that video made me think about a November 2004 interview with Hank Barry, a former partner with the prestigious law firm of Wilson Sonsini.  He was also the CEO of Napster, and is now a Venture Capitalist.   Barry was asked "what’s the big picture future for media and its digital distribution?"  His answer is worth pondering.

"businesses that produce information and then sell that information the form of a “good” (a newspaper, a magazine, a book, a CD) still have big changes ahead, both in the form of their products and channels of distribution. My own view is that they are moving from a “sale of goods” model to a services model. If they move quickly, and don’t spend all their money suing their customers, technology companies and their investors, that transition will bring them closer to their customers and to increased revenues."

Not surprisingly, most of these businesses tend to sue.  It’s not unusual for new technologies to "inspire" litigation, not because it makes business sense, but because when businesses go to lawyers and say we don’t like this new thing that is threatening our business model the lawyers rarely say, "well let’s compare the cost of litigation to the cost of altering your business model."  Lawyers don’t make as much money by encouraging their clients to take stock of business realities (even in the rare case when the lawyer actually considers business realities).  Lawyers can always say "hey, I’m not here to question your business decision, but to advise you on how you can assert legal rights to create business leverage."  That’s a perfectly reasonable response to anyone who works in the legal profession, and  for many business people too.

Business models threatened by social change and technological innovation will continue to cling to life support through litigation. That’s basic human nature.  Old ideas have their own life-force, just like people.  And doctors aren’t the only ones who help preserve life through heroic, but costly and perhaps uncalled for, measures.  Sadly, there are no living wills for moribund business models.

P.S. If you appreciate these kinds of observations, you might want to read this as well.


  • Steve Miller says:

    Dear Ernie,

    I have read with great interest your “critique” of my satirical look at the divorce process. The video, clearly labeled as SATIRE, was not intended as a marketing tool at all; although I thank you for making it into one. Unfortunately, lawyers charge too much, clerks really can’t give any help and paralegal/document preparation companies provide wrong information much of the time and most should be reported to the local authorities for practicing law without a license, it’s a crime.

    I am proud of the service we provide. Our clients are happy. Our website provides our clients with ALL the necessary information and resources. There are instructional videos throughout the site and one video which says what most people think. Sounds like lawyer Ernie is a bit “holier than thou.”

  • Sophmom says:

    Interesting post. Very true. Innovators often go unrewarded too. Sometimes they lose it all. I’m guessing that Sonsini is a VC with a twist, or an edge. I could be wrong.