The company’s now-famous little red envelopes first gained fame around the time the dot-com boom went bust in early 2000. Video rental behemoth Blockbuster, reeling from a catastrophic bleeding of market share to this wily challenger, entered the rent-by-mail fray in 2004, but it soon became apparent that they were going to get their hats handed to them. An even younger upstart, Redbox, began as a subsidiary of McDonald’s, and by 2007 its kiosks has spread across the fruited plains of America like wildfire, in the process putting the final nails in Blockbuster’s coffin.

My folks watch a lot of flicks, either at the theater or at home, so there’s always opportunities for improving the experience — the Great TiVo Immersion Program of 2005, masterminded and forced upon them by moi in the face of strenuous objections, turned out to be life changing. So after years of watching them drive out in the early evening to various video stores, I bought them a year-long Netflix subscription in Christmas 2009, and waited to see how it played out.

To my surprise, they hated it. For a year they bemoaned that Netflix never seemed to have the newest titles already available at the local rental shops. Even when using the service to queue older titles, they never got used to having to wait a day or two for DVDs that they could have in fifteen minutes by driving down the street. Eventually they settled in to using Netflix only for older or obscure films, things they otherwise wouldn’t have rented at all, and of course taking chances on such films was more of a hit-or-miss proposition than using Redbox to rent new movies they were jazzed to see. Meanwhile Netflix’s newest innovation, streaming to computers and TV, went entirely unused.

Now that their subscription is expired and they are once again happily back to using Redbox and video stores exclusively, I found myself wondering whether Redbox had some sort of edge over Netflix I hadn’t adequately factored in — some combination of convenience, selection, and the satisfaction that comes from immediate impulse renting that would soon allow them to supplant Netflix the way Netflix once supplanted Blockbuster.

It wasn’t long before I came to the conclusion that Redbox, for all of its merits, would ultimately flame out before it reached the pinnacle of the video renting mountain. Sure, their business model currently works well for those people who want a new movie and want it tonight. But what of the people whose pop culture horizons go back further than the week’s new releases? Redbox makes a token effort at sprinkling their kiosks with a smattering of older and classic selections, but they don’t even begin to compete with Netflix’s monster backlist.

Furthermore, what of the people who catch some long-running show on TV, and then want to plow through an archive of previous seasons? What of the many people who live in rural areas far from the nearest kiosk? Or the many people who are older and can’t leave the house, or don’t drive due to some disability, or can’t jump in the car and find a Redbox because they are too busy watching young kids? There are many situations where by-mail and streaming models are superior to the selection down the street.

Add to that the chilling precedent of the decline of music CDs — how quickly they went the way of vinyl records and 8-tracks. These days, everyone is increasingly dumping their bookshelves full of CDs in favor of carrying around a single iPod that connects to MP3-enabled speakers in the house, in cars, on the computer, and anywhere else there’s a USB plug. I think it’s beyond any doubt that physical DVDs are soon going to vanish in the exact same way. Even massive blu-rays are now effortlessly copied by pirates and shared over the Net, and legal video distributors like Netflix will all soon be streaming in 1080p resolution to living room TVs.

Netflix jumped onto the unlimited streaming bandwagon years before it became commercially viable, and that foresight will redound to its benefit for many years to come. Streaming is going to be huge, and Redbox, like Blockbuster before it, is being forced to try to compete in that arena. But by doing so they are competing on Netflix’s home turf, facing a company famed for its easy-to-use website, its fantastic movie-recommending algorithms, and its astounding selection of titles.

Once physical DVDs become a non-issue, studios will buckle one by one and offer their new releases to the major streaming companies, just as the record companies all eventually conceded to Apple’s 99 cents per individual song plan. The day new movies are able to be streamed directly to your TV via Netflix on the same day they are available at Redbox kiosks, that’s the end of that brick-and-mortar (metal-and-plastic?) business model.

So I think that when the dust clears, we’ll see Netflix standing tall as the preferred video rental company in the land, streaming its content long after Blockbuster, Redbox, and even many cable companies have declared bankruptcy. Not that they’ll have long to crow about it, given the looming Armageddon hanging over the industry as a whole.

What is that, you ask?

I remember in 1996 buying a 4 gig hard drive and thinking it was the bee’s knees, a virtual Great Plains of unused digital space that would take years to fill. A scant fifteen years later, a single writable DVD in larger than that, and a flash drive is many times bigger while costing many times less. And this trend of exponentially increasing data storage, file compression, and internet bandwidth will eventually hit a seismic pivot point. For me personally, that point will be the day a single torrent appears from some movie-loving college kid called “All movies, 1888-Present,” an archive that has every single title available at Netflix, in a format that will sit comfortably on the latest hard drives or flash drives. Five minutes after clicking on that file, it will be sitting next to the “All music” and “All books” files on the user’s media drive, with the contents capable of being streamed to any number of devices in their electronic world.

That’s when all bets are off, and Netflix (and Hollywood itself) will be left to come up with a whole new business model.

All of Hollywood, in one file, copied down to your computer in five minutes. It will happen, and sooner than anyone thinks possible.

Our industry doesn’t get it at all. And I am talking about top executives down to secretaries.  I am talking about directors to craft service people.  Unfortunately, this is our (DGA) No 1 priority…But within our own members, they just don’t quite understand how serious this is…Hollywood is filled with very famous and successful people…And, we are really famous for our causes.  We care about things.  We step out, and we have our pet causes…The point is when we care about things, we back it with our money and we speak out.  The problem is nobody in this community speaks out about the threat that is actually happening in our community.  And, if we let this threat continue, they will not have the money to contribute to these causes.

The remainder of the article is mostly dedicated to the proposition that the problem stems mostly from the internet.  Mr. Johnson states that government should control the internet to protect the business models of the content providers.  He feels that the bill passed in the Judiciary Committee giving the Justice Department new powers to shut down “rogue” web sites is a good thing.

I beg to differ.  Controlling the internet is not the answer.  The internet should be used for the free expression of ideas and for the free sale of goods and services.  It should not be used for the illegal spread of copyrighted material.  Everyone agrees with this.  But, shutting down sites without due process of law is a bad thing.  It is one more step towards government control of the media and the creating of a de facto communist state.

What should actually be done is what was done to turn Napster into a legal entity.  The court system should be used in the manner for which it was created.  Criminal actions should be brought against illegal web sites.  Civil actions should be brought against those that sell and those that buy copyrighted material illegally.  It worked against Napster in the past and it has worked against numerous other web sites as well.

Under no circumstances should anyone’s property be taken whether it be a web site or more traditional forms of property upon the whims of the Justice Department; especially one under the control of the leftist Eric Holder.  (I wouldn’t even want someone on the right to have that power either.)  The 14th Amendment to the Constitution guarantees everyone due process of the law.  This is not archaic law.  This is law that makes sense.  Let’s not chip away at our Constitutional right just because a problem exists.

And, to emphasize piracy is definitely a problem.  According to the International Motion Picture Association, $6.1 billion was lost by the major motion picture companies to piracy in 2005.  If you include the worldwide motion picture industry which includes independents, the number rises to $18.2 billion.  Mr. Hackford is correct about one thing: if this is not stopped, there will be no motion picture industry left and no more rich Hollywood elites to support their various causes.

However, according to the same study, only 38 percent of that piracy, although a big number, is from Internet sales.  The remainder is from the sale of hard items such as DVDs.  The biggest offenders are:  China where 90%, Russia where 79%, and Thailand where 79% of all estimated sales are lost because of piracy.  I can confirm this about Thailand personally as any movie can be bought on Thanon Sukhumvit, a main street in Bangkok, usually one week or more before it is theatrically released in the United States.  And, to make matters worse, the quality of these pirated DVDs, is not bad.  In some cases, it is as good as commercially available legal DVDs.

But, that’s not the whole problem.  It is not limited to developing nations.  Twenty percent of all piracy according to the above study was directly from the United States.  Again, it is not difficult to find pirated DVDs in downtown Los Angeles or on Canal Street in Manhattan.  And, again, the quality is usually pretty good.  The days of the video being captured by some pirate in a movie theatre with a handheld camera appear to be gone.  The piracy is going on in the labs.  And, I’m sure, for the most part, it is the labs in the United States and probably Los Angeles; the same labs that we entrust with our intellectual property.

And, let’s even take it one step further; here are some additional facts according to the same study:

• $5.5 billion in lost annual earnings among U.S workers
• 141,030 jobs lost
• $837 million in lost annual tax revenue
• $20.5 billion in lost annual output to all U.S. industries

And, this was all in 2005 when Facebook was merely a year old and most of us had not even heard of it.  If Facebook now has over 500 million members, imagine how these numbers may have grown in five years.  Please note that I am not stating that Facebook has anything to do with piracy.  I am only stating that if Facebook has grown by the numbers it has, imagine how much the potential reach of piracy, both internet and otherwise has grown during the same period.

I can state for a fact that it has affected the way we do business in the independent world.  Watermarking delivery items to specific buyers is now common place.  Screeners are not sent out to the media without careful protections in place.  Day and date releases worldwide are now commonplace not only for the major studios but for the independents as well.  This alone increases costs geometrically as you can no longer ship used prints overseas when the American release is finished.  You must now make prints for delivery all over the world even to the smallest countries.  In return, licensing fees have gone down in smaller countries because more of the capital expenditures must go to the cost of making prints than to the copyright holder.

So, in conclusion, the problem is very prevalent.  It may eventually lead to the end of the motion picture industry as we know it.  Mr. Hackford, the director of many great films, may have become a soothsayer.  But, regardless, more government control is not the answer.  Due process and the Constitution must not be ignored.  Let the court system handle the problem.  Keep our freedoms as the Founders intended.

Some years ago, my daughter asked: “…so in the olden times, Dad, when did you see movies?” Hmmmm.  Olden times.  As if the wheel, the pen, writing, music, and entertainment were invented with her generation.  I explained that there were two places to see movies.  Theaters and Television.  That was it.  No DVD, VHS, iPod, or Hulu.com.  My TV Guide search was essential to find the right movies and straighten out my schedule for the week by circling and grading the films.  After all, if a movie came on at 11 p.m., you’d be up for two hours to “The End.”

But each week, when I got the TV Guide in my young hands, it was like opening a present.  Before the internet, I explained to my daughter, we had this ancient forum called a “library” where you could get books on movies and famous actors.

“Oh,” she said.  “You actually go someplace?”

But the TV Guide was a treasure trove.  My favorites –  “The Great Escape” – A.  “Dirty Dozen” – A.  “Run Silent, Run Deep” – A.  Any film by John Ford.  And at least watch anything with Bogart, Flynn, Coooper, Lancaster, Cary Grant, William Powell, Carole Lombard, Katherine Hepburn and others.  I was delighted to discover that stunningly beautiful Hedy Lamarr was granted U.S. Patent 2,292,387 in 1942 for an early version of frequency-hopping based upon a piano roll to change between 88 frequencies.  It was intended to make radio-guided torpedoes harder for enemies to detect or jam. Beautiful and designs weapons.  What a dish!

But around Christmas, the most essential movie was “Scrooge” with  Alistair Sim, a Scottish actor who portrayed Ebenezer Scrooge in the 1951 classic based upon Charles Dicken’s beloved “A Christmas Carol.” Nowadays, of course, you can buy the DVD with both color and black and white versions to our delight.

Alistair Sim

During my years of searching the TV Guide, this films was obscure and hardly remembered.  As I recall, its television screening would occur only once, on Los Angeles Independent channels of 5, 11, or 13 in the years before conglomerate takeovers.

Once.  Only Once.  For a year.

The film is now regarded as a classic but, at the time, Alistair Sim had become an obscure footnote in film history.  His stern visage and scattered hair perfectly complemented his impentrable dark miserly eyes for the role. It’s hard to believe that, with his harsh features, “in 1950 he was voted the most popular film actor in Britain in a national cinema poll.” His earliest successes as a leading man included the police detective in the thriller Green for Danger (1946); as the headmaster of Nutbourne College, co-starring with Dame Margaret Rutherford, in the comedy The Happiest Days of Your Life (1950); and as a writer of lurid crime fiction in the comedy Laughter in Paradise (1951).

He was the definitive Ebenezer Scrooge, the very personification of a miser in a vicious Humbug spirit that there was no chance of his redemption.  And then he was miraculously changed through the Ghosts into a man of such unexpected generosity that the frightened charwoman, played to perfection by Kathleen Harrison, could only flee with fear.

“Scrooge” was screened on near midnight of Christmas Eve.  It did not appear earlier in the week nor later. On Demand Media was science fiction. If you wanted to watch Sim and were one of the few people tuned in to his perfect portrayal as the definitive Scrooge, then you were a member of a group of film junkies who prized movie performances, film history, and pitch-perfect classics crystallized in celluloid.  There was a commitment one had to make to see the film.  If you missed it, you missed it.  No second chances.  No other way to see the film.  It required a decision.  Try explaining that to today’s teenager.  “All that, for a movie?!

What I remember about those Christmases was the sheer joy of Sim’s transformation.  His buoyant burst of generosity with the charwoman.  The little boy running across the snow who Scroorge beseeches to wake up the butcher for the prize meat.  “You mean, the one as big as me?”

Sim reminded me of the joy of Christmas, its real meaning, and the embrace of the Spirit in our lives to spread kindness and goodwill toward men.

Missing the film was like not seeing an old friend on Christmas Eve. Once a year, I made some time for him.  And he spoke to me.

No, it’s not The Ann Coulter Story.

The movie is We The Living, based on the Ayn Rand novel of the same title.  Rand said that We The Living “is as near to an autobiography as I will ever write.”

Conservatives and libertarians have long lamented the scarcity of movies that depict the evils of communism.  Let’s see, there’s Doctor Zhivago, The Killing Fields, The Lives of Others, and… and, well, now there’s We The Living — a long-lost classic filmed in 1942, and now available on DVD for the first time ever.

WTL takes place soon after the Bolshevik takeover of Russia (which Rand experienced as a young woman).  The stunning Alida Valli plays Kira, a fiery college student who detests the communists ruining her country.  (Valli is perhaps best known to American audiences for her indelible performances in The Third Man and The Paradine Case.)

Kira’s formerly bourgeois family struggles to survive as the government outlaws most private trade, rations food and shelter, and implements health-care death panels.  (Okay, I might be confused about that last part.)

Life is a grind for all but the politically privileged.  The masses endure shortages and injustice, while well-connected Party members enjoy special treatment and profit from corruption.  Everything is politicized:  the economy, education, even science (as Party officials inform Kira and her fellow students).

But some forces override politics and even good sense.  At college one day, secret police officer Andrei (Fosco Giachetti) overhears Kira pouring scorn on Bolshevism.  Instead of arresting Kira, the officer is smitten with her.  In turn Kira develops a respect for Andrei bordering on love, despite their ideological differences.

Shortly thereafter, Kira has a chance encounter with the handsome, mysterious Leo (Rossano Brazzi), a free spirit like her, hunted by the authorities.  Kira and Leo have an immediate, almost animal chemistry.

This is one of the most affecting scenes in the movie, an instance of “love at first sight” made credible by the sublimity of the acting.  When they agree to see each other in a month in the same spot, you can’t wait for that month to pass so you can see what happens next.  From here unfolds a tragic romantic triangle marked by jealousy, deception and sacrifice.

WTL has some of Rand’s most layered characters.  In her later work, a character like Andrei the communist might be portrayed as an unalloyed villain.  But in WTL, Andrei gradually reveals a sensitive and decent humanity at odds with his repellent politics.  (Who hasn’t encountered such paradoxes in real people?)

The story behind the movie is nearly as remarkable as the film itself, further proof there is little daylight between fascism and communism.  (Jonah Goldberg, call your book editor.)

We The Living was made during World War II in Mussolini’s Italy, of all places.  The government warily allowed it to be filmed as a propaganda vehicle against the Soviet Union.  But when Mussolini realized the movie was a critique not only of communism but of all forms of statism, he banned it from theatres, where it was a smash hit.

The government rounded up and destroyed all copies of the film – save one, the original negative, which was secreted away.  As we are informed by the fascinating documentary (included among the DVD extras), the film’s reels languished unseen for decades until Rand’s attorneys went hunting for it among the Italian film community.

Duncan Scott, who produced the DVD release, explains how as a young editor he talked his way into recutting and subtitling the film alongside Ayn Rand herself. WTL had originally been released as two separate films.  They combined them, trimmed away some of the excess, and removed or redubbed pro-fascist propaganda speeches inserted at the insistence of the authorities.

Scott tells how in the original version, Andrei delivered a heated diatribe against the evils of capitalism.  Needless to say, this speech didn’t exactly belong.  Not content merely to change the subtitles, Scott actually hired a sound-a-like Italian actor so he could redub the voice track in Italian to match the new subtitles.

Unfortunately the digital transfer was done in 1987, and the cost of a high-definition remastering was prohibitive for this DVD release, so the picture quality isn’t quite as crisp as one might wish.  Nevertheless, it is completely watchable.

Considering the circumstances under which We The Living was made and later restored, this inspiring classic is a tremendous achievement, and a worthy addition to every liberty-lover’s DVD library — and to the too-brief list of films exposing the pitfalls of socialism in whatever form.

In September of 2008, calling it “StealDVD,” the big Hollywood (no pun intended) studios filed suit against RealDVD.

And this past Tuesday — as PC World wrote – RealDVD was dealt a “devastating blow” when U.S. District Court Judge Marilyn Hall Patel “granted a preliminary injunction against sale of RealDVD, pending a trial over copyright infringement.”

It’s too soon to know what will happen, but it appears the movie industry has the upper hand. But is it a victory they cannot afford to win?

As I noted months ago, the irony is that by opposing RealDVD, the movie industry seems to be operating against its own long-term self-interest. As consumers desire more freedoms and options, the most successful companies are embracing the societal changes. Meanwhile, the movie industry has adopted a very un-progressive posture and is hunkering down and simply suing the innovators.

Whereas the music industry seems to have learned that swimming against the modern-day consumer’s demand is a fool’s errand, the movie industry is doubling down. As PC World noted, “It’s perfectly legal to rip music from a CD and upload it onto an iPod for personal use; why can’t a person do the same with their own copies of movies?”

iPod owners own the right to make a certain number of personal copies of their music. Systems are in place to prevent mass piracy. RealDVD would essentially do the same thing. Again, PC World hit the nail on the head, writing that RealDVD allowed “only a single digital copy to be placed on your hard drive. After paying extra licensing fees, you could transfer the digital copy onto as many as five other hard drives. Disc-based burning was never an option.”

It will be interesting to see how this plays out. Hollywood has long presented itself as “cool” and “cutting edge,” yet when it comes to guiding their own industry, they seem mired in a 20th century mindset. The irony here is that instead of allowing a legitimate and innovative company flourish, the movie industry will likely find that more and more piracy sites will emerge and that fewer and fewer people will be buying what they are selling.

As is sadly the case for all good things, the video website Hulu.com may well come under attack by the government, specifically in the form of antitrust action by the Obama administration.

Socialism’s great horde of media apologists has begun a strong drumbeat calling for the U.S. government to go after Hulu, the immensely and increasingly successful source of online streaming media content.

Cord Blomquist of the Competitive Enterprise Institute documents the socialists’ campaign for a government attack on Hulu in an excellent article at the Technology Liberation Front website. “Many media commentators are already using the kind of language we associate with past media antitrust cases,” Blomquist notes.

Blomquist’s conclusion is correct and sobering:

Hulu’s runaway success over the last year and its growing number of exclusivity agreeements mean that it could see some of the added scrutiny that Mr. Obama believes is necessary in the world of media.  Of course, there are thousands of arguments as to why an actual antitrust case would lack any real merit—the availability of media in other formats such as broadcast or DVD, the number of non-exclusive deals Hulu has signed, the low barriers to entry and low costs for others to offer similar streaming video services—yet these arguments have failed to impress judges and administrations in the past.

Blomquist is right. As always, the overwhelming desire of socialists is for unlimited power. When socialists find a successful enterprise, their first instinct is to tame it—and if they fail at that, they will surely destroy it.

—S. T. Karnick

First, he gave Prime Minister Gordon Brown some DVDs that were incompatible with English electronics and then he gave Queen Elizabeth an iPod that contained his speeches.  Well, I hate to admit it, but I can empathize.  Shopping for a prime minister has got to be hard enough, but trying to shop for a woman who has her own country would give me the mother of all migraines.  Frankly, I’m surprised he didn’t just fall back on that old reliable.  When in doubt, I say, you can’t go wrong giving cash.  Which, by the way, seems to be one of the things, as opposed to bowling and speaking without a TelePrompter, at which the president seems to be quite adept.  And, best of all, the cash, unlike the iPod, would be a personal gift because the Queen’s picture would be on it.

But I have to admit I’m beginning to really worry about the Community Organizer in Chief.  I mean, he ran for president as the man who was going to make the world love us like nobody’s loved us, come rain or come shine.  Instead, he’s turned into the master of the gag gift.  I can’t help wondering what this practical joker is going to do next.  Send Prime Minister Netanyahu a honey-baked ham?  Send Mahmud Ahmadinejad a pair of elevator shoes?  Send Pope Benedict XVI a whoopee cushion? 

Frankly, though, I must confess I don’t know why we’re so concerned with how other countries feel about us.  Do you think anyone likes Russia or China, Pakistan or Saudi Arabia?  Do you think Mexico, France or Cuba lie awake nights wondering if Holland will be inviting them to the annual tulip festival?  Do you actually believe that Japan calls up Korea on a Friday afternoon and suggests they go bowling?  Or perhaps you imagine that any country in the world has ever in its entire life said, “You know who I’ve really been missing lately?  Let’s throw a come-as-you-are party and invite good old Germany!”

Ah yes… I can see it now… bedtime at Buckingham Palace…  The Queen emerges from her powder room after her nightly ablutions and gently pads across the oriental carpet in her pink, fuzzy slippers to the edge of her royal bed.  She calls to her maidservant, “Fatima, my dear, before I retire would you fetch me my video iPod?  Not the old one, but the new one I just got from Barry and Michelle.”  “Of course, your Highness,” she replies, quickly exiting the Royal Suite.  Moments later Fatima returns, reverently cradling the radiant object in her hands.  Tenderly taking it from her, the Queen puts in the royal iPod ear buds.  Then, Fatima helps her out of her slippers and into the massive bed, making sure that the goose-down pillows are properly fluffed.  Finally, Fatima places the Royal night-cap on the Queen’s head, and, as the Queen snuggles further into her down comforter, Fatima bids her a pleasant “Good night.”  

Alone now, and with the lights dimmed, the Queen – trembling with anticipation – switches on the iPod and begins to watch the previously loaded photos of the magnificent spectacle of President Obama’s Inauguration. Her eyes wide with delight, she gasps in wonder as Senator Obama places his hand on the Bible and is transformed into President Obama.  Then, warm and cozy in her palace bed, a smile of enchantment on her royal face, the magnificent words of President Obama’s Inauguration speech lull the Queen into a blissful and untroubled sleep. “Change… Hope… Change… Change…change….”

–

 Now here’s a segment that ran just this past Wednesday, March 25, 2009 (Please note, that the man making his bracket picks, was far too busy to pay any attention to the stock market; and couldn’t find the time to shop for an appropriate gift for the British Prime Minister — or at least get DVDs that work in the UK):

–

What’s most most amazing to me is that Letterman pays a sizable staff WGA scale to come up with this stuff. And you thought government workers were lazy. Of course, considering Letterman’s documented propensity to repeat the same exact jokes night after night, I’m beginning to wonder if he might be getting forgetful in his old age. Perhaps his writers are aware of that and have been been taking advantage.

Not only are these segments annoying idol worship of the new star in the White House, and downright mean to a President who was all too human, you really have to wonder how long they intend to run with the joke.

What a country!