The five stages of grief

"The Internet is the equivalent of cancer for big media," said Laurin H. Mills, managing partner at Nixon Peabody LLP. "They are going through the five stages of grief. Right now they are largely in the denial stage. Occasionally they move into anger and sue somebody."

Mills talked about how he had represented newspaper clients for 20 years and said that his clients "had a chance to get this right during the first dotcom boom" but instead ignored the problems presented by the Internet. And "now most news companies are worth less than the real estate they're sitting on. Unbelievable," said Mills.

Technology companies are dragging traditional content providers kicking and screaming into the future, several panelists said.

Google (NASDAQ: GOOG) was cited by Mills as a company that is "ignoring the (copyright) law" and rather than negotiating with copyright owners up front they instead "dare owners to stop them if they can."

She also said Apple's iTunes store has ripped the music industry's ability to control pricing.

Another factor in the distribution of content that's being changed in response to technology, specifically file sharing, is the window of time that movie companies used to have between releasing a film to select theaters, releasing it to all theaters around the world and then making it available on DVD, pay-per-view and whatever other venues they chose for distribution.

Now, once a film hits one theatre, it's being bootlegged, Chaitovitz said. So companies might as well release it through as many venues as possible, as soon as possible, because the film will be widely available hours after a limited release anyway.

"We are aware of the piracy, and we are adapting to it. But there are a lot of factors that go into a release timeframe. The window of time is shrinking, but it can only shrink so far," said Arnaud Robert, corporate vice president of emerging technology strategy at The Walt Disney Company.

And why does piracy exist? Participants at this panel discussion didn't point their trembling fingers at evil consumers; instead they said piracy is caused by bad law, bad technology and bad business models.

Changing the digital ecosystem

Disney's Arnaud placed most of the blame on bad technology.

"We have this ecosystem created by tech companies," he said. "They didn't have consumers in mind or studios, but created platforms that benefited them and really doesn't benefit content owners or consumers. There's a shift that needs to happen away from the (digital distribution) platform silos."

Mills shared a recent experience with trying to do things the right way.

"My law firm has their annual meeting tomorrow. My partner wanted to hand out an article from Fortune at the meeting, and we wanted to do it the right way. We spent three hours figuring out how to do it, and it turns out you have to pay $3 per article to distribute the article. We just said forget it."

He added, "It's a lousy business model. Why doesn't Fortune have a means where you can go on the site and pay 20 cents or 15 cents to get an article? That's why piracy exists. The business models don't make sense."

Article courtesy of InternetNews.com.