Village Roadshow CEO: iiNet Is Lying About Piracy

Village Roadshow CEO: iiNet Is Lying About Piracy
The fight to stamp out piracy is getting bitter in Australia. The battle is divided between content creators and the Government they seemingly have in their pocket, and web giants like Google and Australian internet service providers. One of the Generals in the conflict is Graham Burke, co-CEO of Village Roadshow Australia.
He’s already fighting a battle against Google Australia, and now he has it in for iiNet on the new Western front.


AU Editor’s Note: With site-blocking legislation currently experiencing its first test in Australia’s courts today, this story from June 2014 gives context to plaintiff Village Roadshow’s attitudes to fighting piracy within Australia.

Burke, who has shared an audience with anti-piracy crusader, Attorney-General George Brandis, agrees with the widely-held belief in the content industry that Australia is the global hub for internet piracy.

“Sadly, Australia is statistically one of the worst countries in the world [for piracy]. For example, there are more people downloading Breaking Bad in a country of 23 million people than in America with 300 million people. That’s a pretty serious position to be in,” Burke told me in an exclusive interview.

Burke is part of the industry that is closely tied to Attorney General Brandis as he develops an anti-piracy policy that’s rumoured to include site-blocking and a graduated response plan, or three-strikes system.

iiNet has arguably been at the centre of the local copyright storm for longer than either of the pair have, following the so-called iiTrial last year, which would have seen the internet service provider held ultimately responsible for the piracy habits of its users.

The Australian Federation Against Copyright Theft, an industry lobby witb which Village Roadshow and Graham Burke are affiliated, brought the marathon case to the High Court against iiNet and ultimately lost. iiNet set a new anti-piracy precedent in Australia, and now it’s working again to try and defeat the government’s new anti-piracy measures before they become cast in stone.

Last week, the ISP called on its vast user base to make their feelings against the policy plans known by writing to the relevant Ministers and Shadow Ministers to voice their concerns. iiNet is well within its rights to try and pull a John Oliver by having citizens flood the government with more scorn and derision over internet censorship than it can handle, but it’s a plan that has drawn the ire of Burke, as he tells me in no uncertain terms.

“iiNet have been very vocal in the media about piracy and I find that quite sad. They resort to lies to forward their case whereas I believe we [Village Roadshow and the content industry] deal with a straight bat. We represent and what is in the best interest of 906,000 Aussies whose lives depend on copyright.

“What iiNet are saying to government is ‘oh, let’s just have everything available at the same time, cinema and everything and the [piracy] problem will go away. They know that’s a lie because of the music industry. In June alone there was 1.2 million illegal downloads of music, and that’s released at exactly the same time everywhere,” Burke said.

Piracy produces less of a financial burden for the music industry, according to Burke. Producing an album only costs around $300,000 at the top end, whereas the cost of making a film in the studio model starts at $5 million, and ranges right up to $200 million for epics like Skyfall, Man of Steel and Avatar. Studios are happy to invest such insane numbers on projects like Pirates Of The Carribean: At World’s End, for example, when they make profits of $963.4 million for the studio. It’s a river of gold that they understandably want to protect, so they turn to lobbying and legislation like graduated response or “three-strikes” models as a balm to ease the pain of online content theft.

“It’s sad that to forward their case, [iiNet] use what they must know is a fabric of lies.”

Three-strike models are favoured by studios like Village Roadshow, and Generals like Graham Burke. He says that the reason more countries don’t have them is because the road to legislation is constantly blocked by factions like Google and iiNet marshalling their forces with what he calls “lies”.

“It’s sad that to forward their case, [iiNet] use what they must know is a fabric of lies. They’re saying that there’s no proof that graduated response works. They’re instancing a number of countries where graduated response was frustrated by lobbying and the power of Google, which pays little to no tax in Australia and creates nothing,” he said.

Following the iiTrial victory, Burke says that the ISP is happy to let its users carry on pirating as long as it’s profitable to them.

“They [iiNet] are also demonstrating the fact that their business model is predicated on selling time, and of course they want the present regime to continue. [Pirates] have a smorgasbord of content online that they are accessing, and paying iiNet for the systems to do so. This is a company that has produced nothing in Australia. Meanwhile, Village and its partners have produced $2.6 billion of feature film production. We have just hired 2600 people on the gold coast working on a film. We’ve got people in Warnambool, and pre-production in Perth on the prequel to Red Dog. This is very real employment. Aussie film production is important to who we are.”

In a recent call-to-arms blog post, iiNet’s Steve Dalby said that the content industry is working hand-in-glove with the government to develop an anti-piracy plan that would negatively affect the nation’s digital economy. Burke, naturally, rejects that assertion outright.

“Some of the stuff Steve Dalby has said is just outrageous, and he’s got to know it’s outrageous too.”

So in Graham Burke’s perfect world, how would we solve piracy? According to the man himself, it can be done with education.

[Pirates] have a smorgasbord of content online that they are accessing, and paying iiNet for the systems to do so

Burke says that content creators already have new business models in place for the modern consumer, adding that the ‘enemy’ would have you believe differently.

“Google and iiNet are saying that copyright owners like us are not interested in new business models, but there are now 10 new business models and there are more coming.”

“That’s part of their fabric of lies.”

Burke says that the industry also needs to run an education campaign that wins hearts and minds.

“If people are given elegant explanations of why [downloading content] is theft, the bulk of people will be reasonable. My nephew doesn’t understand but if it’s explained, he gets it,” Burke explains. The operative word in that sentence ought to be “elegant”: the last time the content industry aimed at winning hearts and minds, we got the “You Wouldn’t Steal A…” ad campaign which was laughed out of cinemas.

But if winning hearts and minds doesn’t work, the industry needs a legislative stick in a modified three-strikes plan. Rather than boot a user off an ISP at the end of a three-strikes warning period, Burke would see the speed of the connection slowed down in a big way.

“The ISPs, they’re ruthless. If someone doesn’t pay their bills, they’re gone. If you check the website of iiNet, if you’re exceeding your plan and taking more space, they will throttle you until you pay up. They have no problem [throttling users] for selfish narrow and financial gain. The answer is that if you’re still pirating we’re going to slow your speed down,” he explains.

At the end of the day, the source of the fight comes back to money. If companies like Village Roadshow are forced to reduce the their exclusive content window, it also reduces the amount of money they are able to recoup from bums in seats at a cinema, which is how movies that cost up to $300 million to produce are able to make back their money.

The content industry doesn’t want to cede too much ground to new business models, save companies like Apple, Microsoft and Google making money in their marketplaces which studios believe belongs in their coffers. It’s this gridlock over who gets the money in the 21st century that’s delaying a decent fix for people stealing content.

Piracy is a complex problem, and there’s no simple cure-all. Web giants, ISPs and users will all say that availability and cheaper prices will see a changing of the tide, but content industry heavyweights who are all used to being paid in rivers of gold for the work of artists see it as an incoming drought, with funds being diverted to those marketplaces rather than back into production and profit.

Piracy will never be eliminated entirely. There will always be a sliver of the market that pirates, steals and copies content, but the rights-holders would have you believe it’s a mountain of a problem rather than the mole hill it really is. The amount of people stealing Game Of Thrones via BitTorrent is negligible when compared to the $1.86 billion dollars that walks out the door under the shirts of shoplifters in Australia every year. You never hear people like Graham Burke stand up and denounce people wearing baggy hoodies walking into big box retailers. Piracy is the sexy problem, and it’s better to use a policy sledgehammer to crack a nut than it is to make a move that might compromise quarterly earnings for a content creator.

“My nephew doesn’t understand [why downloading is wrong] but if it’s explained, he gets it…”

Legislation is coming, but the government needs to tread lightly when it comes to potentially hamstringing one of the most connected digital economies (per capita) in the world with ineffectual laws. Graham Burke is commanding the forces of regulation for the content creators, and a coalition of web giants are attempting to marshal a defence. At the end of the day, the final decision on regulation needs to be influenced by voters: people like you and me who can respond to a public consultation on the matter.

Whose side are you on?

More: iiNet’s Steve Dalby To Village Roadshow: ‘It’s Not Our Job To Stop Online Infringers’