The Animation Options Blog

My apologies for the dramatic reduction in blogging.  The past couple of months have been a mad rush of activity, compounded by my participation in two events:  the Jilin International Animation, Comics & Games Forum in September, and the 1st Zhengzhou International Animation Forum in October.  And now the American Film Market in November.  :-)

You can read all about the goings-on in Jilin and Zhengzhou on the Animation Options press page, including video of me trying to keep up with a young monk onstage at Shaolin Temple.  ;-)

The 12th Shanghai International Film Festival and market wrapped this week. It goes without saying that many great films were screened. But what I found most intriguing was the festival’s FORUM program, which provided lively discussions on a range of topics related to Chinese film production and international co-production - including story development, financing, and IP protection.

Sunday’s keynote address, “Made In China: What Kind of Films Does the Chinese Market Want?”, provoked a lively debate among the directors and producers on the panel. Director Ning Hao provocatively declared, “Movie makers in China lag behind the U.S. and lack certain fundamentals. The American filmmakers plan much more in advance before shooting.” Most concurred that the next 5 years will be pivotal for the Chinese film industry as the attention of the world turns to the mainland. Yu Dong, CEO of the Polybona Film Company, forecast that it is only a matter of time before a mainland Chinese film turns in a $100 million USD box office. To put this in perspective, there are currently only a handful of Chinese directors in China’s “Million Dollar Club”, and that’s 100 million RMB, not USD (the exchange rate being about 6.84 RMB to 1 USD). Nevertheless, Yu Dong soundly observed, “You cannot force distributors to support you. You need to attend to your presentation.” Certainly, a dramatic increase in China’s 4,000 movie screens will be required to realize this prediction (the U.S. has 10 times as many screens with less than 1/4 of China’s population). As this blog observed in “My Forbidden Kingdom For A Screen!”, the mainland Chinese audience continues to be remarkably untapped. Chen Guowei, Vice General Manager of the Wanda Cinema Line Corporation, remarked that films must be entertaining and resonant in order to do well in the market. In other words, they should not only be tasty, but also nourishing. Director Wei Te-Sheng noted ruefully that, “Everything beautiful is being measured.” He blamed “market rules” for overwhelming producers and “killing” the creation and distribution of independent films. “And if you successfully break these rules, ” he laughed, “they call it an exception!” In China, as in Hollywood, some things never change.

Monday morning’s roundtable discussion on “Asian Regional Cooperation” covered the ins and outs of Chinese co-productions, including the importance of matching story to partner, and the pros & cons of written vs. oral agreements. Many on the roundtable concurred that while a good contract is essential to a successful co-production, not every contingency can be adequately covered on paper - mutual respect and trust are paramount. To this point, producer Wang Zhonglei candidly admitted, “When China began to collaborate with other countries, we didn’t take many things seriously.” Corona Pictures’ Julian Alcantara brought his experiences with the Indian film industry to bear, noting how the Indian government moved from recognizing film as an industry only 10 years ago, to quickly adopting a more Western style of planning, production and distribution - with multiple international co-production treaties. The remarkable example of “Slumdog Millionaire” was raised, where an Indian story, cast and crew combined with an English director (Danny Boyle) and production leadership. Yet Mr. Alcantara cautioned how close “Slumdog” came to never even making the theaters. He mused how many other wonderful films audiences will never see due to the vagaries of international co-productions and independent filmmaking in general. Polybona’s Yu Dong repeated that China’s cinema lines must be more productively arranged in order to capitalize on market potential and stated: “I think Chinese filmmakers should collaborate with overseas distributors before movies are made, to ensure a better product.” Julian Alcantara seconded this notion, which this blog has long advocated: “Distributors often complain that producers don’t come to talk to them sooner. The earlier producers and distributors correspond ensures the success of both sides.”

Monday afternoon featured a high-octane keynote entitled, “Soft Power: Financial Innovation & Cinema Expansion”, helmed by none other than MPAA Chairman and former Clinton cabinet member Dan Glickman. Mr. Glickman’s amusingly direct speech went straight after the issues of piracy and market access restrictions on the Chinese mainland - not only linking the two, but noting the negative impact to domestic Chinese filmmakers as well as foreign filmmakers. Said Glickman, “If you don’t give audiences the front door, they’ll take the back door.” IDG’s Patrick McGovern, the “father of venture capital in China”, revealed that almost all of his company’s VC is vested in Asia. Touting the focus and benefits of IDG’s China Media Fund, McGovern remarked, “This is an opportunity for us to work with young directors and producers in China.” IDG is a founding investor in China’s Sohu.com, among other “community-based” media enterprises that target shared experience. Wellington Fung of the Hong Kong Film Council commented on the advantages of Hong Kong’s status as a “free port city for creation and investment”, but cautioned, “Small and mid-sized movies with lesser actors and new directors are higher risk - they attract fewer investors and need more support.” Lawyer Stephen Saltzman of Loeb & Loeb (who will open a Beijing office soon), followed up on this point with the observation that film financing and insurance sources are drying up for independents in the face of the global economic crisis (tell me about it). In a nutshell for Hollywood, foreign money was replaced by Wall Street money, which then fell out. And while Chinese banks and distributors are beginning to get on board with their domestic films, U.S. banks and distributors are conversely pulling back. Said Saltzman, “You might get 20-40% of your funding without a presale, but how do you get the rest?” Responded Patrick McGovern, “Private equity.” IDG typically looks for an average annual rate of return of 30-40% on their investments (to the amusement of some Chinese executives on the panel), but McGovern confided his faith in the principle that “20% of your investments will make 80% of your returns” - hence the importance of a diversified portfolio of media investments. The necessity of completion bonds as a reassurance to investors was discussed, but this concept seemed foreign to most of the Chinese filmmakers, who typically create their domestic movies without them. On the topic of intellectual property protection Stephen Saltzman remarked, “If children grow up thinking that content is free, content providers will have to make their revenue through other streams”. (We’re already seeing this scenario come to pass.) One audience member raised the ominous question for filmmakers of what will happen when these self-entitled children grow up to be the next generation of lawmakers. In closing, the most encouraging observation with respect to co-productions is that the “passive” nature of these relationships has become an increasingly “active” partnership - to the creative and financial benefit of both sides.

The co-pro mojo continued on Tuesday with the “Chinese-Foreign Film Co-Production Forum” keynote panel. Director Han Sanping noted China’s 30 major-market cities and bravely predicted that box office on the mainland will be 30 billion RMB in 10 years time. Julian Alcantara continued his poignant mantra: “We need to appreciate how easy it is for a film the world knows to be a film the world has never seen.” Alcantara declared that co-productions must not only encompass the financial, but also the organizational, artistic and technical. Noting that many non-U.S. filmmakers must go outside of their country to achieve success, he asked provocatively, “Are you Chinese filmmakers… or are you filmmakers who happen to be Chinese?” Zhang Zhao, president of Enlight Pictures, commented that regional distribution systems are required to achieve the box office numbers hoped for in China. On the subject of the global appeal of Chinese film he remarked, “Animated characters may have an international appeal that exceeds that of live-action actors.” This led to the question of whether Chinese audiences themselves like to watch Chinese films. Legendary director John Woo declared (to the appreciative laughter of the room), “We used to have good films, but no audience. Now we have a huge audience, but no good films.” Woo continued: “Most Asian audiences are not interested in Chinese-made epic films. They are considered too heavy. Hollywood is considered ‘The Best’. People will watch Hollywood films in the theaters, and watch their own country’s films on DVD. So, how do we make films that bring audiences to the theaters?”

That’s the $100 million USD question.

After meeting with Senate approval, the controversial Orphan Works bill of 2008 has been pronounced “dead on arrival” in the House of Representatives. Appears that Congress has more important things to worry about at the moment, such as the imminent collapse of the U.S. and global economies.

WIRED reports:

Lost in the House of Representatives’ push to pass $700 billion bailout legislation is the so-called Shawn Bentley Orphan Works Act of 2008.

Late Friday, the Senate passed the measure and sent it to the House, where it landed dead on arrival.

The act changes the rules and reduces and sometimes nullifies damages for infringing uses of so-called “orphaned” works as long as there was a “diligent” effort to locate the copyright owner. Orphaned creative works are those in which the copyright holder cannot be promptly located.

Lobbyists have assured Threat Level that the House, which is mired in trying to broker an economic revival package, won’t take up the measure, at least not until after the November elections.

Dozens of copyright groups opposed the measure, saying it encourages infringement. Copyright expert Lawrence Lessig was against it as well. He said the bill was too vague when it comes to defining how “diligent” of an effort is required to locate a copyright owner before a work is infringed upon.

Digital rights groups like Public Knowledge hailed the measure. The group said “it would restore much needed balance to copyright law.”

To be continued…

Imagine a system of protection for content creators that required you to register your work in a centralized government respository, at your own expense, before you could file an infringement suit in court. Imagine that this monopolistic repository charged ever-increasing fees, with no competitive pressures to drive costs downward. Imagine furthermore that you were required to register your work within 3 months of publication or prior to infringement in order to recoup attorney’s fees and receive statutory damages, and that you were in any event at the mercy of corporate interests with powerful legal teams and deep pockets. And as for international protection, forget it - the system effectively washed its hands of that arena. Finally, after all this, imagine that the system prescribed that your work should ultimately become part of the public domain - to be used by anyone in any manner that they wish - irrespective of your wishes or intentions as represented by your descendants. And then visualize how this system could be exploited by corporate interests for commercial gain at the expense of the very individuals it was purported to protect.

Can you picture that? Shouldn’t be too difficult, because it’s our current system of copyright protection: well-meaning, flawed, subjective and increasingly outdated. However, to listen to some of the opponents of the Orphan Works legislation currently working its way through Congress, you’d think that a full-scale assault was underway on the Constitution of the United States (insert Dick Cheney joke here).

I blogged at length on this topic a couple of days ago, so the point here is not to rehash. But there are a few ignorant misconceptions being irresponsibly promulgated as fact that must be addressed in the interest of informed discourse.

MISCONCEPTION #1: “All of your existing works will effectively be orphaned with the passage of this bill into law.”

This distorted reading of the pending legislation is predicated upon the misinterpretation that content owners/creators will be required to register their works in non-existent databases in order to keep them from turning into orphaned pumpkins when the clock strikes twelve. The Orphan Works legislation winding its way through Congress does indeed propose databases (both public and private) as one way for owners/creators to register their ownership, but THE USE OF SUCH DATABASES IS NOT REQUIRED TO RETAIN COPYRIGHT OWNERSHIP OF YOUR WORK. (Please take a second and read that line again.) Furthermore, the lack of identifying marks on a work is not in and of itself sufficient cause to consider the work “orphaned”. Here is the language to that effect from H.R. 5889:

(iii) LACK OF IDENTIFYING INFORMATION- The fact that a particular copy or phonorecord lacks identifying information pertaining to the owner of the infringed copyright is not sufficient to meet the conditions under paragraph (1)(A)(i)(I)

Just as you are not currently required to put your name on your works, nor affix a copyright date, in order to enjoy copyright, neither are you required to do so in order to protect your works from being considered as “orphaned”. Copyright is still yours as soon as your work is fixed into tangible form:
http://www.copyright.gov/circs/circ1.html#hsc

(Having said that, common sense should dictate that the more ownership information you provide on any piece of creative content, the better. It’s in your interest to make it easy to know who created your work, and how you may be contacted.)

MISCONCEPTION #2: “These privatized databases will be free to charge whatever they like to register your work.”

Of course they will be free to charge whatever they like, but so what? In the first place, the use of these registries is not REQUIRED. In the second place (simply for the sake of argument), when have you ever heard of a registry service in which fees went UP over time? Are URL registries getting more expensive every year, or less? Are web hosting services getting more expensive every year, or less? (Oh, wait… I just thought of a registry that is free to increase their fees with no competitive recourse: our present-day U.S. Copyright Office.) In the third place, the Orphan Works legislation clearly states (as one of four minimum requirements for due diligence on the part of content users):

use of appropriate databases, including databases that are available to the public through the Internet

Got a website with your work on it? Then you’ve got a database that is available to the public through the internet.

MISCONCEPTION #3: “You will need to scan all of your existing works, at your own expense of up to $100 per piece.”

Ok… first of all, for those of you who are paying $100 a pop to have your works scanned, I’ll do it for $75. No, wait - make that $50! And then I’ve got a bridge in Brooklyn to sell you… cheap! Who in their right mind pays that to have anything scanned? More to the point, you don’t have to scan any of your physical works in order to protect them. The very fact that they are fixed in physical form qualifies them for copyright protection and, as mentioned above, identifying marks are not even a prerequisite for protection against “orphanage”. Obviously, your work can be physically stolen, the same way that someone can steal your camera or your car. So if you want to “lojack” them through scanning, that’s certainly your prerogative. But if you truly can’t sleep at night over this (and don’t want to spring a hundred bucks for a scanner), you can always take the “low-fi” approach, buy one of those “do-it-yourself” rubber stamp kits for $10, and tap the back of each drawing with your name, phone number, email and copyright date while you’re watching “America’s Got Talent”.

If you’re posting your work online, it’s a simple enough matter (although again, not a requirement) to slap a copyright date on in Photoshop and also throw some ID in the file’s meta - if you’re so inclined. (I trust that those of you with your shorts in a twist over the potential copyright infringement of your work are all running legit copies of Photoshop, right? Of course you are!)

MISCONCEPTION #4: “This is all just a corporate power grab.”

Sorry, but it isn’t. The Orphan Works legislation currently before Congress - imperfect as it is, but better than it was - has been introduced to address the very real concerns of curators, archivists, librarians, publishers, writers and documentarians who avoid using abandoned archival works for fear of potential legal action. In our extremely litigious society, such fears are regrettably not unfounded - to the diminishment of the free exchange of ideas and the public good.

Will some corporate interests attempt to influence and take advantage of new copyright law? Absolutely - just as they do with existing laws. That is the nature of corporate interests. All the more reason for artists to engage in reasonable debate and thoughtful participation, rather than indulge in irrational fear-mongering.

In closing, I’d like to leave you with thoughts from two esteemed individuals in our industry: Steve Worth, Director and Archivist at ASIFA Hollywood, and Michel Gagne, noted artist and animator.

The insightful Steve Worth:

Keep in mind what we’re talking about when we discuss “orphan works”. The images you post on your webpage under your domain with your name on the page and perhaps even on the image itself along with a copyright notice will never be considered “orphaned”… not as long as a person who wants to license the image from you can contact you to negotiate terms. “Orphan works” by definition have no reachable owner to discuss licensing with. The creator is dead. The publisher is no longer in business. There is no transfer of title on record. The work is basically abandoned.

The difference between this orphan works legislation and fair use is that the orphan works legislation establishes a method for licensing material that appears to be without a legal owner- fair use requires no permission or license at all.

And the enlightened Michel Gagne:

Personally, I’d put a cap of, say, 50 years on copyrights, then a work would enter public domain. That’s it. This way, work could be archived easily without interference. Work could be repackaged by entrepreneurial archivists and be rediscovered by new generations.

Artists are here to enhance our world and their work should be given to humanity after a certain amount of years. And that’s coming from someone who has close to 30 IPs copyrighted.

Peace and love, my friends.

Amen to that!

Kevin Geiger

Something of a panic has gripped the independent creative community over the Orphan Works legislation currently working its way through Congress. The outcry began over the problematic Orphan Works Act of 2006 (H.R. 5439), which suffered a well-deserved death in September of that year, and resurfaced this spring with the introduction of the revised Orphan Works Act of 2008 (S. 2913, H.R. 5889) on April 24th. Unfortunately, there has been no shortage of fear-mongering since that time, with artists crying “Fire!” in crowded movie theaters on blogs and discussion boards across the Internet. To make matters worse, creators who have yet to even review the proposed legislation have been only too eager to dog-pile in outrage over the “corporate power-grab” which this apparent infringement on their rights supposedly represents.

Before I go any further, let me fully disclose the context from which I speak. I was schooled in the fine and applied arts, and have made my living both as an independent artist and in the animation industry. I have registered various copyrights and trademarks over the course of my career, and have no interest in seeing my creative work used without my consent. So, in the world of “users” and “owners” (those who use copyrighted work and those who create and/or own it), you can place me squarely in the camp of “owner”. In short - I’m a content creator. Yet I see the need for Orphan Works legislation, and firmly believe that the process should not be feared and obstructed, but rather engaged and capitalized upon. (Indeed, the Chinese word for “crisis”, wei ji, literally translates as “dangerous opportunity”.)

Orphan Works legislation attempts to address a long-standing problem that recently came to a head at the Holocaust Memorial Museum, where curators are sitting on a vast collection of family photos from Holocaust victims - unwilling to exhibit them for fear of statutory damages and attorney’s fees. These photos are so-called “orphan works” with no identifiable owner. The problem of orphan works is very real. In short, an “orphan work” is one that is protected by copyright, but whose creator/owner cannot be identified and located. Given that copyright law currently protects your work for the course of your lifetime plus 70 years beyond your death, there is plenty of time to lose track of who owns what - especially in the case of unmarked works. Those in favor of Orphan Works legislation include most curators and archivists, librarians and publishers, writers and documentarians. Steve Worth, Director of ASIFA Hollywood, puts it thus:

As an archivist at a non-profit museum and library, I would love to make the material in the ASIFA-Hollywood Animation Archive more widely available. But unless the situation changes, the treasures we are accumulating will be bottled up in a building on Burbank Blvd. It’s important to be able to get the information out to the people who can use it in the way that they want to be able to access it. The idea of a library being a big building with marble walls and bookcases is a thing of the past. So are archives that make you sit at a table and wear white gloves while someone hands you a box and stands over your shoulder watching you while you open it. Today, the greatest library, museum and archive in the world is sitting on everyone’s desk and it’s connected by a wire to everyone else’s desk. Copyright law needs to change to reflect those new realities, if it doesn’t it will continue to be an impediment to learning.

Those opposed include many fine artists, photographers, designers, writers and other content creators. The Illustrators’ Partnership of America, the National Press Photographers Association and the Advertising Photographers of America have been leading the charge for protest and action. Nevertheless, the Professional Photographers of America, the Picture Archive Council of America and the North American Nature Photography Association support the current House bill. The Graphic Artists Guild, while not supporting the legislation, has asked its members to refrain from writing protest letters.

Mark Dery of print magazine, not an advocate of the Orphan Works Act in any way, nevertheless takes an even-handed view that is quite frankly missing from most of what passes as discourse on this topic:

Clearly, the tangle of copyright law that constricts the public domain and criminalizes noncommercial remixing—that recut Star Wars video or music mash-up you just uploaded—needs detangling. But, just as clearly, we shouldn’t trample the rights of the individual creator in our rush to throw wide the gates of the creative commons. The right of copyright holders to determine how their works are used must be balanced with the right of fair use. The ability of the individual creator to profit from the sale of her work, free from infringement, is desperately important. But so is greater access to the orphaned works of artists lost in time.

There is great pressure on Congress to adopt some form of Orphan Works legislation, based upon the notion of the “Public Good”, which tends to outweigh consideration for individuals claiming economic impact. Like it or not, there is a societal need to facilitate the free exchange of information and ideas that all but guarantees some form of Orphan Works bill will eventually pass. For artists to pester Congress to reject any bill whatsoever is ultimately more harmful, as it removes any incentive for our lawmakers to accommodate the genuine material concerns of content creators. Far better to encourage our public servants to include language that protects the rights of creators and owners while also addressing the principle of the Public Good. And as for “Private Evil” (the aforementioned “corporate power grab” that some of my colleagues are whipped up about), yes - it’s true that most companies will be happy to see an Orphan Works bill become law… just as it’s true that there will be some that seek to take advantage of the situation. But taking advantage of situations is all in a day’s work for corporations. It’s to be expected, if not embraced. So, what possible sense does it make for artists to effectively remove themselves from the table by “just saying no”? None, from where I sit.

The 2008 Orphan Works legislation provides for a limitation on statutory damages and/or attorney’s fees imposed against the user of a copyrighted work as long as the following hold true:

• The user undertook a qualifying search to locate the owner, and could not find him/her
• The user identified the owner to the extent possible when using the work
• The user stopped using the work if the owner surfaced and requested a cease-and-desist
• The user acted in good faith in searching for and negotiating with the owner
• The user paid royalties to the owner on a “willing seller, willing buyer” standard if the use was commercial in nature, for certain usage categories

The 2008 legislation also includes the following:

• A study of the copyright registration deposit system by the General Accountability Office
• A requirement that orphan works be identified with a special symbol to be determined by the Copyright Office

In addition to the above provisions contained within the recently passed Senate version, the House version of the Orphan Works Act (H.R. 5889) contains these considerations:

• Delay of the effective date of commencement until the earlier of 2013 or the date on which the Register of Copyrights certifies two databases that can be used to search for works
• A requirement for users to file an advance Notice of Use with the Copyright Office
• Allowance for judges to award extra compensation if a work was registered

As of this writing, the Senate has passed its version of the Orphan Works bill. Given that the House version of the bill contains language that is more amenable to content creators (such as the requirement of a Notice of Use), the smart play is to encourage your Representatives to stick to their guns and not adopt the Senate’s language.

It goes without saying that you should always be sure to cover yourself by:

• Registering your work with the Copyright Office
• Marking physical copies with your name & contact info
• Embedding metadata in digital copies with your name & contact info
• Requesting credits on print uses of your work

Nevertheless, it is important to note that while registration of your work is strongly advised as a matter of practice, you are not required to register your work to keep it from becoming “orphaned”. Registration is valuable because it protects your rights to the fullest extent possible, but if you can be identified and found without the benefit of a registry, then your work cannot be considered “orphaned”. It also cannot be considered an orphan work simply because a user is unwilling to look for you, or because you decline to license or sell it. Believe it or not, even a lack of ownership information attached to a work fails to automatically qualify it as “orphaned” (much in the same way that you are not required to brand your children with your name in order to keep the state from rustling them up).

The matter of what constitutes a “reasonable search” for the owner is the primary concern of users and owners alike (though for opposite reasons, obviously). A fair and feasible standard must be created that takes into account variations of commercial and non-commercial use, among many other factors - such as whether the private sector should be allowed to offer registration services, and what fees might be involved. This is an area in which the most incendiary claims are being made by those opposed to Orphan Works legislation, including that:

• Your entire body of artistic output will be automatically “orphaned” with the passage of this bill into law
• You will be required to scan and register, at your own expense, every piece of artwork you have ever created in order to received copyright protection

In the first place, the use of an “orphan work” requires, at a minimum, the following due diligence (as specified in S. 2913):

• a search of the records of the Copyright Office that are available to the public through the Internet and relevant to identifying and locating copyright owners, provided there is sufficient identifying information on which to construct a search;
• a search of reasonably available sources of copyright authorship and ownership information and, where appropriate, licensor information;
• use of appropriate technology tools, printed publications, and where reasonable, internal or external expert assistance; and
• use of appropriate databases, including databases that are available to the public through the Internet;

Given these provisions, which represent the minimum definition of a “reasonable search”, it is hard to imagine litigation-shy corporations appropriating works willy-nilly like kids in a candy store. When in doubt, the instinct will be to avoid trouble. And any companies that lack this instinct are already liable to infringe (and prepared to fend off court challenges) under current law, so the “new” concern is ultimately a wash.

Let’s also take a good look at that last provision: the use of databases that are available to the public through the Internet. Got a website with your work on it? Then your work already fits Congress’ definition of being in a database available to the public. Infringer beware! And to my earlier point about finding opportunity in the face of “crisis”, imagine the traffic benefits to sites such as The Illustrator’s Partnership of America or Animation Nation if they offered free database services to their members. Makes plenty of Google Adsense to me.

“But… what about all of my work in physical form that has not been digitized?” Well, at the risk of sarcasm, are you expecting a corporate paramilitary team to come rappelling into your house to separate you from your art? If so, you’ve probably got bigger problems than orphan works. If not, take the same precautions with your sketchbooks that you do with your checkbooks, and employ sensible measures to collect and protect your digital droppings.

The Orphan Works Act is certainly not ideal, but neither is current copyright law. Is the former being put forward in the spirit of Fair Use, just as the latter was? Yes. Are there problems with the former and the latter? Yes. Can we imagine the possibility of abuse of the former? Yes. Can we acknowledge the reality of abuse of the latter? Yes.

As with any piece of legislation, there will be pros and cons, unintended consequences and unforeseen benefits. But the train is rolling. You can block the track and get run over, or you can jump on board and help steer. So by all means, write your legislator immediately - but consider your stance carefully.

And don’t forget to sign it!