Movies in the Digital Age

Thursday, April 8, 2004
5:00 - 6:45 p.m.

Bartos Theater
20 Ames Street


Jack Valenti, president of the Motion Picture Association of America (MPAA), will discuss the impact of digital technology on the entertainment industry. Drawing on his experience as an advocate for major producers and distributors of entertainment programming for television, cable, home video, he will discuss the promise and the dangers of emerging technologies for the production and distribution of films and TV shows.


As president of the Motion Picture Association of America (MPAA), Jack Valenti is a leading figure in the American film and television industry's efforts to fight digital piracy. A former journalist, Valenti has written three non-fiction books - The Bitter Taste of Glory, A Very Human President, and Speak Up With Confidence - and the political novel, Protect and Defend. He earned a B.A. from the University of Houston and an M.B.A. from Harvard.

Moderator: Thomas Doherty is associate professor of American Studies and chair of the Film Studies Program at Brandeis University. His books include Pre-Code Hollywood: Sex, Immorality, and Insurrection in American Cinema, 1930-1934 and Cold War, Cool Medium: Television, McCarthyism, and American Culture. He also serves on the editorial boards of Cinema Journal and Cineaste.


[This is an edited summary, not a verbatim transcript.]

THOMAS DOHERTY introduced Jack Valenti by offering a brief account of his career in advertising, national politics and president for 38 years of the Motion Picture Association of America. Recalling Valenti's service as a special advisor to President Lyndon B. Johnson, Doherty described him as "an eyewitness to, and participant in, more than his share of history." The organization that became the MPAA was established in 1922, Doherty said. Since then "there have been seven popes, 15 U.S. presidents, and 33 managers of the Boston Red Sox, but only three presidents of the MPAA."

Jack Valenti

JACK VALENTI spoke of his service under Lyndon B. Johnson, and his early days as MPAA president, but focused on the current issues of piracy and the need for new distribution models for movies. But first, he acknowledged a band of students who were dressed as pirates in the audience. He jokingly welcomed these "friends of Johnny Depp, the Pirates of the Caribbean."

When Valenti took the reigns as MPAA president in 1966, his first major initiative was to remove the last vestiges of Hays Office censorship. In 1968 he abolished the Production Code, the industry-imposed set of guidelines that spelled out what was not considered morally acceptable in the production of movies. As an alternative, he introduced the movie ratings system.

When he instituted the film rating system, he had two objectives in mind: first to protect children and provide a warning system for parents, but more importantly to "free the screen." As a defender and advocate of the First Amendment, Valenti despises the censorship of the Production Code, which limited the kind of stories directors could tell. However, with the directors' right to tell stories is the concomitant right of the audience not to watch them. Despite criticism that the system is too subjective, Valenti defends it as necessary for parents to be able to make decisions about their children.

In the last decade, copyright protection and piracy have overtaken censorship issues as the main concerns of the MPAA. In a media world that is becoming increasingly digital, Valenti sees the need for changing attitudes towards intellectual property, and the necessity for new business models for the online distribution of movies.

Valenti believes there is something substantive about creative property, such as a poem or movie, that makes it just real as physical property; and that it ought to have the same rights and privileges. He makes an analogy that forms the root of his beliefs on intellectual property and piracy: "If I make a table," he says, "it is my table and no one can test that. If you take it out of my house or garage, you've taken something that belongs to me, and we know that's not right. Why isn't something that flourishes in the seedbed of somebody's imagination as worthy as making a table?"

For Valenti, copying a DVD is an act of stealing, not very different from stealing a DVD from a video store. Valenti cannot understand why people would never steal a DVD from Blockbuster's for fear of being arrested, but delight in copying a DVD for themselves. When people can take movies without paying for them, such piracy threatens an artist's ability to be creative.

Technology is rapidly advancing, and people will soon be able to download media faster than before. At Caltech, Valenti learned of an experimental development called FAST, a data transfer protocol for the Internet that is fast enough to download a full-length movie in less than five seconds, and could be introduced to the market in as little as 18 months. Valenti believes that piracy will rise with the increased sophistication of technology. At a higher rate of piracy, this kind of pillaging will make it hard to nourish new talent and promote movies.

Digital Pirate

Valenti recognizes the Internet as the greatest distribution channel that ever existed. The movie industry is willing to embrace the web as an efficient distribution system, to make movies available on demand for a price that is fair to the consumer and delivered in a safe fashion. This will give people more choices than they ever had in terms of movie titles and ways of viewing. This is why Valenti and other members of the industry are aggressively meeting with IT people for help with developing the technology for protection.

Valenti believes in objective and detailed discourse, and has great respect for people like Lawrence Lessig, with whom he disagrees on certain issues but values the friendship and discussion they share. He is anguished by the hostility and partisanship in politics today, which was not present in the days of the Johnson administration.


DOHERTY: In your testimony before Congress last September, you addressed piracy as a threefold problem. There is the technological problem of protecting movies and DVDs from being illegally copied and distributed. The need for aggressive enforcement of the law, or the rewriting of laws made in the pre-digital age is a legal problem. Finally, there is the ethical problem, which I believe is the most important. How can you change the mentality of people who don't believe they are stealing by copying or downloading movies?

VALENTI: I don't know that we can. On all the college campuses I have visited so far, I find the same attitudes among even the most brilliant students, the so-called "leaders of tomorrow." Although they agree that it is a kind of stealing, they reason that everyone does it, and that it costs too much to buy CDs and DVDs anyway. They don't believe they are hurting the industry when stars and studios make so much money. What they don't realize is the carpenters and lighting crews feel the effect too. As the copyright holder, the studio helps to ensure that the film will collect all its revenue and make a profit. Every movie and TV show has residuals that go to a pension for the welfare funds of different guilds. Members of the guilds get a piece of every film that is made. I only ask that people consider whether or not creative property is worthy of being respected.

DOHERTY: In 1968, Congress passed the Copyright Term Extension Act, which extended corporate and author copyrights for an additional 20 years. Why was the film industry so zealous about getting this passed? This act is enabling huge conglomerates to constrain works that should be in the public domain.

VALENTI: The principle reason for the Extension Act was to provide for the same term of protection as exists in Europe. A difference in copyright terms between the United States and Europe would negatively affect the international operations of the entertainment industry, since American works that are in the public domain here could be expoited elsewhere.

DOHERTY: In your testimony before Congress, you expressed vehement opposition to both Internet piracy and the ready access to pornography on the web. The two issues are linked in that pornography, like movies, is available on peer-to-peer (P2P) file sharing systems.

VALENTI: I have an old-fashioned obligation to parents. Most parents do not know when they go to file swapping sites that it is an amalgam of music, movies, and the most squalid pornography. The most offensive material is available for children to download. Yet because I believe so strongly in the First Amendment, I want parents to be able to deal with it, so I sound these alarms.

DOHERTY: In the 1930s, the Production Code was established as a self-regulatory agency that allowed classical Hollywood to thrive without the hassle of federal censorship. With the Production Code, the criteria for what was acceptable in movies was standardized and published. How does today's ratings board make its decisions?

Jack Velenti

VALENTI: When I invented the movie ratings system, I consulted with many social scientists and psychologists about what could be considered excessive violence, or what constituted adult content. Their ideas were vapory. To this day, even the Supreme Court is unable to define obscenity. It is a very subjective process.

The ratings board is composed of parents who look at films through the eyes of parents. The ratings system merely tells something about a film. A director can accept the rating he is given, or appeal to a board of theater owners and distributors. No director has to cut a millimeter of film — it is still his decision what to include or exclude in a movie.

HENRY JENKINS, director, Comparative Media Studies: What you are describing as a crisis in copyright is also a crisis in fair use. As digital technology has expanded our ability to quote media, there is a lack of leadership in Hollywood for defining guidelines for what constitutes fair use. Studios demand such a high price from academics who use material for teaching. Why can't the MPAA help establish guidelines for the scholarly use of materials? Can you work with academics to enable and promote media literacy?

VALENTI: It is very hard for the MPAA to set guidelines for each individual owner of a movie and say what they can or cannot charge, because of anti-trust laws. The MPAA is not allowed to set a business model for every owner.

QUESTION: You have spoken before against VHS, that if people could record programs with their VCRs, it would be the death of the movie industry. But now VHS and DVD sales make up over half the industry's profits.

VALENTI: No one remembers the context in which I said that. Instead of abolishing VHS, I believed there should be a copyright royalty fee on blank cassettes, which is what they do in Europe now, and the money goes back to the owners of the copyright. The Supreme Court did not rule that VHS infringed upon copyrights, so there was no royalty fee.

QUESTION: The record industry blames piracy for the decline in music sales, but there are other factors such as the lagging economy, or the rise in spending on video games and other forms of entertainment. My personal experience was that downloading got me more interested in music, and I have actually spent more money on CDs. How do they make the correlation that the increase in downloading leads to decrease in sales? Do you expect the same correlation for movies?

VALENTI: I cannot speak for the music industry, and I don't make the same correlation for movies today. Rather, my emphasis is on looking towards the future of movies. Right now, it takes a while to download movies even with a broadband connection. Next year, it could take 5 seconds if systems like FAST are launched. If that happens, the fate of the movie industry will be bleak.

QUESTION: I have a problem with how the industry defines the terms "stealing" and "loss." Making a copy of a movie is not the same as stealing a DVD from the video store, because they still have their copy. I don't mean to say it's not wrong, but it is not the same. How can the industry attribute monetary losses to piracy when it represents money they never had? For example, I could download movies that I would never pay to see in the first place.

VALENTI: The industry loses about $3.5 billion worldwide in analog and hard goods piracy. This means that if you buy a DVD on the streets of Beijing, you will not buy a legitimate copy from a store. That is how we calculate the loss of a sale. Lost revenues are what every business calculates. We don't have a number on the losses from digital piracy. As I said before, I'm not as concerned about what's happening today, but what will happen in the future.

IAN CONDRY, MIT Foreign Languages and Literature: Isn't it misleading to say that creative property is the same as a table? File sharing takes place in a kind of ethical setting, where you are often sharing with friends and there is a social aspect. Can non-commercial use such as sampling or building interest for a piece of work be acceptable? I also believe that people will always pay for quality. Why not build that side of the equation instead? As Asia and other parts of the world are building different ideas of intellectual property, are you putting the American industry at risk by protecting revenues rather than generating enthusiasm for new media?

VALENTI: I don't agree that a space like Kazaa is ethical. If one copy of a movie is available online for the whole world to see at home, then no one will buy it. Only about 1.5 out of 10 movies make their money back from theatrical exhibition. Movies need other venues such as cable and home video to survive. If you shrink the profits from those venues, you shrink the reinvestment in movies. Non-commercial use will destroy the business, which is very fragile.

ANDREW BROOKS, MIT Media Lab: What about the rights of consumers who buy DVDs legitimately, but suffer from problems with regional codes? I purchase a DVD in Australia and can't see it in the United States, which makes me want to download movies.

VALENTI: Regional codes were the result of parallel imports. Smugglers from Asia ship bootleg material to the U.S., and regional codes ensure that such discs cannot be played. I understand why they came into being, but there are machines now that can play all codes.

QUESTION: Since the South Korean film industry has become more vibrant, it is trying to defend the quota system that requires movie theaters to show homegrown movies on at least 40% of their screens. Can you comment on that situation?

VALENTI: The quota demands South Korean cinemas show local films at least 146 days a year. I am fighting that quota because I am an advocate of competition. We have the right to enter their market as much as they can enter the U.S market. They just need to find a theater and distributor for it here. If a theater in Korea wants to show an American film, it should have the right to. Some theaters have to close because there are not enough Korean movies to keep them alive.

Jack Valenti and Tom Doherty

QUESTION: The music industry is trying a different business model with websites like Apple's iTunes that charges $0.99 per download. Are there any new business models for selling movies?

VALENTI: There are websites like Movielink and Cinema Now that have Internet rentals for low prices. New channels for movies are still being tested and improved.

CLARA FERNANDEZ, CMS graduate student: A large amount of money is spent on publicity for a movie. Why can't the industry focus on the quality of the movie, and rely more on word of mouth?

VALENTI: Marketing is important because it gets the public in an excited, movie-going mood. It only helps a movie on the first weekend. After that, word of mouth does take over. Marketing adds to the social experience of a movie that is not easily duplicated .

ANDREA McCARTY, CMS graduate student: Projection in theaters is being converted to digital — is this helping the industry by saving costs in distribution?

VALENTI: There are 178 digital screens worldwide, and the number will grow exponentially. The possibility of beaming a movie to multiple theaters saves a lot of money. Transporting large, awkward movie reels are more of a hassle. However, keep in mind that the visual quality of 35 millimeter is still very good, though a digital image is slightly more pristine.

MATTHEW WEISE, CMS graduate student: Can you elaborate on what a bleak future for the movie industry might actually look like?

VALENTI: It won't be the end of Hollywood, but it will be very different. There will be more pilfering of movies, because it is so easy. There will be less investment in films, fewer films made, and jobs will be lost. There is already much unrest over movie productions moving to Canada, so imagine if there are fewer productions.

Valenti also spoke of his career before the MPAA, in particular his relationship with Lyndon B. Johnson. In 1952, he co-founded the advertising and political consulting agency of Weekley & Valenti. In 1955 he met then Senate Majority Leader Johnson. Valenti's agency was in charge of the press during the visit of President John F. Kennedy to Texas. Valenti was in the motorcade, six cars back of the president, when he was assassinated in Dallas on November 22, 1963. Within an hour of Kennedy's assassination, Valenti was hired as Special Assistant to President Johnson.

QUESTION: Who or what were the most significant influences in your life?

VALENTI: Lyndon B. Johnson had the biggest impact on my life; I would not be speaking before you today without him. My current job with the movie industry may seem glamorous enough, but my three years working in the White House was the "summer" of my life. Helping the president to improve American society was beyond personal ambition or reward. Many great things were passed under Johnson, including the Civil Rights Act of 1964, Medicare, and the support of education through federal grants. I owe everything to Johnson.

DOHERTY: Can you share your account of what happened on November 22, 1963, when John F. Kennedy was assassinated?

VALENTI: I have a searing memory of the events that I pray this country will never go through again. I was in the motorcade, six cars behind Kennedy. When the cars ahead of us suddenly went from eight to eighty miles per hour, it never crossed my mind that such a brutal act had occurred. I thought the president was late for his speech at the Dallas Trade Mart, and I ordered our driver to take us there. That is where I found out that the president and governor had been shot. A deputy's car took me to Parkland Hospital. When one of Johnson's aides told me the president was dead, I became unhinged. But I had to compose myself, because he told me I was to go aboard Air Force One, and I had no idea why.

A police car took me to Love Field where I boarded Air Force One. There, Johnson asked me to fly back to Washington with him and be on his staff. I had never even been to the White House, and didn't know what it meant to be on the president's staff. I didn't have a place to live in Washington, so Johnson said I could stay with him for the time being. So I lived on the third floor of the White House for a month and a half. I was one of two special assistants to ever live there; the other was Harry Hopkins under Franklin D. Roosevelt.

Johnson made a crucial decision on the airplane that I marvel at: he wanted to be sworn in with a proper ceremony. He wanted a picture of it to be flashed around the world, so that amid the anxiety and desperation, he could show that the Constitution worked - that the nation goes on, and the president lives. Johnson asked Mrs. Kennedy to stand beside him to show that Kennedy's legacy would be carried on. Mrs. Kennedy was in a catatonic trance; her pink blouse was still stained with blood, and she wouldn't change it. I am in that picture watching the two of them, stunned at the enormity of the situation.

After Johnson was sworn in on the plane, we flew to Washington. That night, we watched TV as the picture of the ceremony flashed around the world. Johnson ruminated over the bills and acts he would go on to pass. When I went to bed, I wondered if it was all a nightmare.

--summary by Lilly Kam
--photos by Vera Leung