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This story first appeared in the March 13 issue of The Hollywood Reporter magazine.
If you want to see how conflicted and toothless the MPAA is these days, look no further than perhaps the biggest digital issue ever to be debated on Capitol Hill: net neutrality.
Providing loud and vigorous support for net neutrality, which holds that digital content should be delivered at the same speed for the same price from any provider on any platform to any user uniformly, should be a no-brainer for a lobbying body whose constituents make some of the most popular content in the world — namely, Hollywood movies.
Yet, when it comes to the net neutrality debate, the MPAA’s silence has been deafening. The reason? Comcast, which owns NBCUniversal, making the $149 billion company both a producer of movies through Universal Studios and a distributor of them through its cable and ISP operation. Though Comcast makes content, that part of its business is much less profitable than its distribution operation, and as a result, its corporate position is to not support net neutrality’s Title II proposition, which calls for regulating Internet service providers much like a public utility. The issue is of even greater importance to Comcast when looked at through the prism of its impending $42 billion merger with Time Warner Cable, a deal done primarily to solidify its position as the nation’s biggest Internet service provider.
But because Comcast doesn’t support Title II, neither can the MPAA, given its unwritten rule that all decisions must be unanimous among its six studio members. So even though Sony, Disney and Warner Bros. have or are planning to launch streaming video services and presumably would support a regulation mandating that all their content be delivered equally as opposed to, say, having Disney’s delivered faster because it paid Comcast to prioritize it, the MPAA is handcuffed.
Such powerlessness begs the question: Is the MPAA even necessary anymore?
Sure, from the end of World War II until 2004 when Jack Valenti retired as CEO, the MPAA was a powerful lobbying force in Washington, D.C. But as its constituents, which also include Paramount and 20th Century Fox, became small parts of global conglomerates, the lobbying part of its mandate has been neutered by competing corporate agendas.
Consider the cyberattack against Sony Pictures. That a studio was hacked because of The Interview should have been a First Amendment rallying cry for the MPAA. Instead, it remained largely on the sidelines, in part because some of its member studios weren’t inclined to support what they viewed as Sony’s poor judgment. As one exec put it, “We didn’t tell Sony to greenlight a movie about North Korea, so why should we be pulled into that fight?”
True, but that doesn’t mean that Sony Entertainment CEO Michael Lynton‘s criticism of the MPAA for not rushing to the studio’s defense isn’t valid. Indeed, the scope of the MPAA has been so narrowed that it basically only comprises four areas — the battle against piracy, rating movies, supporting state tax incentives and limited lobbying. And where it once was the industry’s lobbyist, today its members have their own lobbying and antipiracy efforts.
With such a limited remit, does the MPAA still need an annual budget of $120 million, more than 70 employees (many highly compensated) and an army of consultants and vendors? Former Sen. Christopher Dodd was hired as CEO in 2011 primarily because of his influence and connections in D.C. But mostly he is paid $3.3 million a year to find compromises that keep his members in alignment. As economic, social, political and technological issues reverberate through show business, that may not be worth it.
Why not, as one industry executive suggests, “dissolve the organization”?
“Shrink down the Washington office to five or six people who do nothing but try to coordinate positions, so when they agree on something, they can make a joint filing or lobbying effort,” this source adds.
One alternative would be to expand MPAA membership, but that already has been quietly tried, and it failed. It isn’t easy to convince businesses to pay dues of nearly $20 million a year. Lionsgate and CBS Films, for instance, have rebuffed recruitment attempts by the MPAA in recent years. As one source involved in those attempts puts it, “They asked the same question — what am I going to get for it that I don’t already get?”
Some suggest expanding into TV, possibly by lowering the cost to new members. But among the four broadcast networks, three already are members (Disney, Comcast, Fox) and CBS has passed. Cable companies, digital players and technology companies are just as unlikely to see the value, and many have opposed the MPAA before. (Remember the SOPA debate? The MPAA lost that one.)
Sources say the studio heads have expressed private support for Dodd, 70, even after the Sony hack debacle. Perhaps they should be looking not at Dodd but at the future of the MPAA itself.
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