July 19, 2012 6:23pm PT by Eriq Gardner
Viacom Top Lawyer Michael Fricklas on Piracy, YouTube and His Toughest Decisions (Q&A)
Call him Snooki's lawyer. Or the man who defends the foul-mouthed kids on South Park. As the general counsel at Viacom, corporate parent of MTV, Comedy Central and Paramount Pictures, Michael Fricklas is responsible for the legal issues for the 11,000-employee company that produces thousands of hours of film and TV content each year.
It’s not what you’d expect from a guy who got an electrical engineering degree from the University of Colorado and then went onto work for technology companies. He got his law degree from Boston University and joined Viacom in 1993.
Now, the 52-year-old Fricklas, who on Wednesday received The Hollywood Reporter's annual Raising the Bar award at the annual Power Lawyers breakfast, is involved in all sorts of cutting edge issues in entertainment, particularly on the intellectual property front. For the last five years, Fricklas has been spearheading Viacom’s $1 billion lawsuit against YouTube.
When he’s not working, Fricklas is often at Lincoln Center, where he’s on the board of trustees for the cultural institute’s jazz section. A night of jazz or a night watching Viacom’s ‘Jersey Shore’? No contest. “’Jersey Shore’ isn’t my demographic,” he says.
The Hollywood Reporter: What’s the toughest decision you ever had to make at Viacom?
Michael Fricklas: [There are many decisions regarding] anti-piracy. We have to make a lot of tough decisions on that front. As the saying goes, ‘The customer is always right." At the same time, a lot of people are making a ton of money trying to convince the customer they own stuff they don’t own and there are lots of decisions we make every day that are nuanced… Deciding to sue YouTube, we really felt that we had no choice when that occurred. We felt like content was being stolen, people were refusing to do anything about it, including the most obvious of steps.
THR: Do you consider piracy your biggest ongoing concern?
Fricklas: I would say it is among them. There is a whole constellation of issues affecting the business today that reflect the unprecedented amount of change that is occurring in the production and distribution of content. It used to be, we would have three years of conversations about what in retrospect seems like a pretty simple business model. You may remember the advent of the DVD. From when the first prototypes were shown to full scale adoption was years and during that period of time, we worked out how they would be retailed and packaged and what the economic model was, whether they would be priced for rental or priced for sell-through and all that sort of thing. Business models evolve today quickly with less control.
THR: Kind of like what was going on last year with Viacom’s dispute with Cablevision and Time Warner Cable over iPad streaming, right?
Fricklas: It’s about the scope of copyrights and our contracts and the willingness of distributors to do things even if they don’t have an express rights grant. Partly they are doing things because they are feeling the pressure of others out there, who may be acting without any rights at all. Those with rights must compete with them and everyone is feeling the pressure to move quickly and adapt. At the same time, the proper set of negotiations surrounding rights takes time.
THR: The YouTube decision came out at the 2nd Circuit a couple of months ago. What do you think of it? Did it resolved the issues that cloud what ISPs are obligated to do?
Fricklas: I think it is extremely helpful. Because what the decision said, as a practical matter is that if you are a service provider, maybe before you were told that you could do anything you wanted as long as you responded to a takedown notice. Now, you have to read the 2nd Circuit decision and as a practical matter say, ‘You know what? I ought to be not actively taking steps to prevent myself from knowing about what’s on my site. Does that mean I ought to filter? Maybe --it depends on the circumstance. Do I need to let my employees know if they see something that is obviously pirated, we should do something about it instead of trying to pretend we never saw it? It does.’
THR: Is the decision itself enough to deter the bad guys or do you need a bigger outcome now that YouTube case is at the lower court again?
Fricklas: Well, the bad guys are flaunting the law anyway, so for the really bad guys, you didn’t need the YouTube case. But what it does is it takes those who want to be responsible businesses, and gives them rules of the road. That’s why if you think about the offensiveness at the origins of YouTube, it’s that a respectable corporate citizen was engaged in behavior that before had been allocated to the Kim Dotcoms, the Groksters, and the like. So we think that the line needed to be clearer. One of the lessons of the SOPA and PIPA debate was that people were confused or concerned that the line would blur. Our view is that it is easy to figure out the worst of the worst, and the 2nd appellate decision will continue to make that clear because the good guys are going to take that legal advice and be fine and the guys who just don’t care are going to be even more outliers.
THR: And YouTube, what’s the end-game?
Fricklas: Remember, YouTube wasn’t just a case about money. YouTube made the decision that they are going to filter. And they do. They did that after a year of us bringing the case. So this case is no longer about that issue. It’s merely about they built a business that’s dominant online and got there through piracy, or in a large part through piracy and is there a compensation to the copyright owners for that?
THR: What do you think the entertainment industry could be doing better with respect to piracy?
Fricklas: There’s been a lot of research on what consumers actually think about this topic. And the so-called big uprising on SOPA and PIPA doesn’t really reflect the positions of the general consumer. I think we ought to be out there and pointing out that appropriate property rights have long been shown to drive innovation and they continue to be extremely important for innovation.
THR: Ari Emanuel recently suggested there be a summit between the tech and content worlds. Do you think that would be productive?
Fricklas: I have no idea whether it would be productive. I do think at the end of the day, solutions are going to lie among various players getting closer. The question is what are the incentives that are going to drive the parties to get together.
THR: What do you think the difference is between being GC of Viacom and being the GC of Google?
Fricklas: Well, I give Kent Walker, who is a friend of mine, credit for sitting on top of an organization that is making a lot of change and is taking a ton of risk and as a result is pushing up against a lot of legal issues that are undecided. It’s a very hard place to be right now. Being at a company that’s that innovative, that is trying to change that much all at once, has got to be one of the greatest jobs as well as one of the most challenging jobs there is.
THR: A lot of people are familiar with the big stuff, but give me an example of something unusual that you might see in a given day?
Fricklas: When we first launched Jackass for MTV Networks, we got a demand letter and ultimately a lawsuit from a guy whose name was “Jack Ass” who claimed we were infringing on his name. There’s that whole diet of oddball things. Most recently we had a great victory in the 7th Circuit regarding fair use where South Park made a video of an internet video, ‘What What in the Butt.’ We have Jon Stewart and Stephen Colbert, who I have tremendous admiration for and watch religiously. They tend to have really interesting issues. When Colbert decided to run for president, we worked with him regarding issues related to his PAC. There is a lot of cutting edge stuff going on with both of these shows. What they do is important and from a mind share point of view, it's an important part of my work.
THR: Besides protection of content, what other things keep you up at night?
Fricklas: I was at conference a few days ago, where it was all general counsels, and they give people a clicker, and they asked all sorts of questions. And 70% said that the thing that keeps them up at night is compliance issues. Because that’s the area that is hardest to control from your seat as a general counsel. There are 11,000 employees and making sure every one of them is behaving in an ethical, compliant way. We’ve been fortunate that compliance issues at Viacom have been very few. It’s through hard work and commitment, but everyone worries that it takes only a small number of people to do something stupid to create a big problem. It takes a lot of constant attention and worry to make sure that everyone gets it.
THR: Especially since Viacom is global, right?
Fricklas: Yes, we are doing business in Russia and China, among other places. If you took a list of Transparency International’s riskiest places to do business, [you'll find us.] We’ve put on music concerts in difficult places in Africa, we made the Kite Runner in Afghanistan. And yet we've had few issues.
THR: It must give you a unique perspective of global affairs?
Fricklas: It does. It also makes me appreciate how challenging the jobs are of the lawyers in the organization and others and what a good job they do.